Windows gaming saw notable improvements in 2025, and Microsoft plans to go even further in 2026. In a blog post, the software giant detailed all the ways it has updated Windows gaming on PCs and handhelds, and improved compatibility with Arm PCs. The question is, can these updates help Windows gaming truly compete with Steam?
One of the biggest enhancements we saw this year was on the handheld front, thanks to the Xbox full-screen experience (FSE) that debuted on the Asus ROG Xbox Ally. This launcher not only provides a more Xbox-like experience for the best handheld gaming consoles, but more importantly, minimizes Windows 11 background tasks to improve frame rates and battery life. Though SteamOS is still a better handheld operating system, the FSE makes Windows handheld gaming more viable.
Advanced Shader Delivery (ASD) on the ROG Xbox Ally is another substantial update that gets you into a game faster by delivering precompiled shaders when you first install a game. If you’ve ever had to sit through shaders getting installed separately from the initial install, you’re no doubt happy about this change.
Microsoft also discussed how Windows gaming has improved on Arm-based computers. Users can download and play supported games directly from the Xbox PC app, which includes many of the games available on Xbox Game Pass. There is also support for AVX and AVX2 extensions to the Prism emulator that allows x86/x64 software to run on Arm. This results in greater game compatibility on Arm PCs such as the best laptops running on Qualcomm’s Snapdragon X chips.
Looking to 2026, Microsoft wants to bring the FSE to more Windows devices. Windows and Xbox Insiders can actually test this feature right now for the best Windows laptops and best 2-in-1 laptops, and desktops running on Windows. Microsoft also plans to expand ASD support for more devices and bring a public preview of Auto SR (Microsoft’s answer to Nvidia DLSS and AMD’s FSR) to the ROG Xbox Ally X. We can also expect the company to continue improving performance and graphics through software updates.
Outlook
There’s no denying that Microsoft is taking PC gaming more seriously, especially since Valve now allows SteamOS on non-Valve hardware. That said, Steam is the de facto leader of PC gaming, with wide support from gamers and developers alike.
Microsoft has a tough battle ahead in this space, but if it continues improving, then perhaps Windows gaming can be a viable competitor to Steam.
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