Handheld PCs in 2026: The Steam Deck Grew Up, Xbox Joined In, and Everything Got Pricier

In February 2022, Valve began shipping a chunky handheld with a 7-inch screen, two trackpads and a starting price of $399. The Steam Deck was supposed to be an experiment. Instead it created a hardware category, and by 2026 that category has Microsoft's Xbox logo on it, Lenovo selling machines that run Valve's software, and prices that start to look like gaming laptops.

The headline of 2026 is cost. In May, Valve raised the Steam Deck OLED from $549 to $789 for 512GB and from $649 to $949 for 1TB, and dropped the cheaper LCD model. Lenovo's top Legion Go 2 rose from $1,349 to $1,999.99 at US retailers. Asus's ROG Xbox Ally X held at $999.99. The handheld PC has grown up, and it has stopped being cheap.

How a niche became a category

Handheld Windows PCs existed before the Deck. Small Chinese makers such as GPD crowdfunded pocket gaming PCs from 2016. But they were enthusiast gadgets with fiddly software. Valve's advantage was that it owned both the store and the operating system. SteamOS, its Linux-based system, opened straight into a controller-friendly Steam library, and its Proton compatibility layer let Windows games run without the user having to know how.

The big PC makers followed quickly. Asus launched the ROG Ally in 2023, Lenovo the first Legion Go later that year, and MSI the Intel-powered Claw in 2024. Most of them ran Windows, which brought access to every PC store but also a desktop operating system that was never designed for a small touchscreen.

How big did it get? Research firm IDC, in figures commissioned by The Verge, estimated about 6 million handheld gaming PCs had been sold through 2024, with the Steam Deck the large majority. Valve itself has only ever said "multiple millions." That is small next to the Nintendo Switch, but large enough to change how PC games are made: thousands of games now carry Valve's "Steam Deck Verified" badge.

Xbox gets a handheld, sort of

The biggest new entrant was Microsoft. On October 16, 2025, Asus launched two handhelds carrying the Xbox name: the ROG Xbox Ally at $599.99 and the ROG Xbox Ally X at $999.99. The cheaper model uses AMD's Ryzen Z2 A chip with 16GB of memory; the X uses the Ryzen AI Z2 Extreme with 24GB.

They are Windows PCs, not Xbox consoles. Microsoft's contribution was a new gaming mode for Windows 11 designed for handhelds, plus Xbox branding and controller design. For Microsoft, the Ally is a way to sell Game Pass and PC games on Windows to people who might otherwise buy a Steam Deck. It also hints at where Xbox hardware is heading: AMD has said Microsoft's next Xbox, built on an AMD chip, is on track to support a launch in 2027.

SteamOS breaks out

Valve's software is now spreading beyond its own hardware. Lenovo released a version of its smaller Legion Go S running SteamOS in 2025, the first licensed SteamOS handheld from another company. At CES in January 2026, it announced a SteamOS edition of the larger Legion Go 2, starting at $1,199, versus $1,049 for the Windows version at the time, with availability planned for June 2026.

This matters because it turns SteamOS into a platform other companies can build on, a little like Android on phones. It also shows up in Valve's own data. In October 2026, Linux reached 3.95% of Steam users in the Steam Hardware Survey, much of it from Deck-style devices.

And then there is Valve's new living-room computer, the Steam Machine, which launched in June 2026 at $1,049 for 512GB. It uses the same SteamOS interface as the Deck, so a game verified for one tends to run well on the other.

The memory squeeze

Why did handheld prices jump in 2026? The short answer is memory. Handheld PCs rely on fast LPDDR5X memory soldered to the board, the same family of chips being bought up by AI data centres. When memory prices multiplied from late 2025, handheld makers had little room to absorb the cost.

Valve was the most transparent: its new Deck prices reflect "the current state of component costs and other global logistical challenges," it said. Lenovo's increases on the Legion Go 2 were attributed to the memory and storage crisis. Asus, by contrast, told The Verge in April that there was "no price increase on the horizon" for the Xbox Ally X, which, at $999.99, suddenly looked competitive.

The result is a strange market. In 2022, a Steam Deck cost less than a PS5. In late 2026, a 512GB Steam Deck OLED costs $789, more than a US PS5 at $649.99. The Nintendo Switch 2, at $499.99, is now the budget handheld.

That is a big shift in who handheld PCs compete with. Nintendo's machine sold 3.5 million units in its first four days after launching in June 2025 and has since passed 26 million, numbers no handheld PC comes close to. For a family choosing one handheld, the Switch 2 is now the cheaper option as well as the simpler one. Handheld PCs increasingly sell to a different buyer: someone who already owns hundreds of games on Steam and wants to take them along.

By the numbers

• $399: starting price of the original Steam Deck in 2022
• $789 / $949: Steam Deck OLED 512GB and 1TB prices since May 2026
• 6 million: IDC's estimate of handheld gaming PCs sold through 2024
• $599.99 / $999.99: ROG Xbox Ally and Ally X launch prices, October 2025
• $1,999.99: top Legion Go 2 price after Lenovo's 2026 increases
• 3.95%: Linux share of Steam users in October 2026

Why it matters

Handheld PCs changed what "PC gaming" means. Developers now test games for a 15-watt chip and a 7- or 8-inch screen, and that discipline helps players on older desktops too. Valve proved that a store owner can build hardware that sells, Microsoft proved it wants a piece of that, and Lenovo proved SteamOS can work on someone else's device.

WGC's take: 2026's price rises hurt, but they do not end the category. They reshape it. The cheap entry point has moved from the Steam Deck to used Decks and the Switch 2, while new handheld PCs are becoming premium devices for people who already own a big Steam library.

What to watch

Keep an eye on three things. First, whether memory prices ease in 2027, as some industry executives expect, which would decide whether a cheaper Deck returns. Second, how many other makers adopt SteamOS after Lenovo. Third, Microsoft's next Xbox, which AMD says is on track for a 2027 launch, and whether its Windows-based Xbox Ally strategy becomes a blueprint for that console. For the wider story of why every device got pricier, read our long read on the RAM crisis.