Omdia: 2.3 million PC gaming handhelds will be sold in 2025

Omdia forecasts significant growth in the PC gaming handheld market, projecting sales to reach 2.3 million units in 2025, a 32% year-over-year increase, and 4.7 million by 2029. This expansion is anticipated despite current Windows 11 and performance limitations, driven by upcoming Windows 11 gaming mode improvements, new Xbox-branded handhelds launching in late 2025, and Microsoft's strategic partnership with AMD for advanced APUs. Concurrently, the broader handheld market will see the 2025 arrival of the Nintendo Switch 2, contributing to over 20 million combined Switch unit sales; however, Omdia notes the original Switch's unique selling point has commoditized, creating a strategic opportunity for PC handhelds to attract a broader audience beyond traditional PC gaming enthusiasts.

Analysis

The PC gaming handheld market is poised for significant expansion, with Omdia research forecasting a 32% year-over-year sales increase to 2.3 million units in 2025 and projecting annual sales of 4.7 million by 2029. This growth trajectory is anticipated despite current headwinds, including a Windows 11 operating system described as "poorly suited" for handhelds and a lack of a "generational leap in performance" over the market-leading Steam Deck. However, 2025 is positioned as a pivotal year, with catalysts expected to address these issues directly. Key drivers include a refreshed Windows 11 gaming mode, the launch of the first Xbox-branded handhelds, and a strategic partnership between Microsoft (MSFT) and AMD (AMD) to develop semi-custom APUs that promise a substantial performance boost. Concurrently, the broader handheld landscape will be reshaped by the 2025 launch of the Nintendo Switch 2. While Omdia predicts over 20 million combined Switch sales in 2025, it also notes that the original Switch's core value proposition of high-quality portable gaming has been commoditized, creating a strategic opportunity for PC-based competitors to attract a wider audience during the new console's upgrade cycle.

Key Decisions for Investors

• Investors should view Microsoft's multiple strategic initiatives as significant positive catalysts, as its efforts to improve the Windows OS for gaming, launch a first-party Xbox handheld, and partner with AMD on next-gen APUs position it as a primary beneficiary of the sector's growth.
• The competitive dynamic with Nintendo is a critical factor to monitor; the launch of the Switch 2 in 2025 presents an opportunity for PC handhelds to capture market share from the console audience, potentially expanding the total addressable market for companies like Microsoft and its hardware partners.
• While the long-term outlook is positive, acknowledge that near-term success for PC handhelds is contingent on the effective execution of the announced software and hardware improvements, as current devices still face notable performance and user experience challenges.