Recent leaks have revealed that Microsoft's entry into the mobile gaming market has almost taken a very different path than what we see today. Instead of collaborating with ASUS to develop the ROG Xbox Ally and Ally X, the company initially planned to produce a fully portable Xbox from its own in-house.

But the project, according to reliable leaker KeplerL2, was canceled at the planning stage due to strict conditions from AMD. Microsoft had been in talks with AMD to develop a custom processor (SoC) for the device, but the collaboration collapsed when AMD demanded a commitment from Microsoft to produce at least 10 million units to offset research and development costs.

Microsoft considered this requirement to be too risky, especially in light of the limited sales of rival mobile gaming consoles such as the Steam Deck, which sold only about 5 million units, and ROG and Legion devices from ASUS and Lenovo, which sold only 1 to 2 million units.

KeplerL2 explained in the NeoGAF forum that the project was canceled for this very reason, noting that Microsoft did not see in the current market a justification for committing to such a large number of productions.