Microsoft has been focused on cloud gaming via phones instead.

The Steam Deck has kick-started a wave of handhelds from some of the big names in PC gaming. Asus has its Windows-powered ROG Ally, Lenovo just announced its own Legion Go handheld PC, and Logitech released a cloud-focused handheld. AMD has been quietly arming an entire new wave of Steam Deck competitors, and that got me thinking: where’s Microsoft’s Xbox handheld?

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Do you mean Xbox Game Pass Ultimate? It can be streamed out of a browser or mobile app.
Why would they need a hardware device when your probably holding a device that supports cloud streaming and they can milk you for a subscription fee?

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