Valve's Steam Deck handheld is designed to operate on Steam OS, a customized version of Linux. However, it has the capability of running Windows, and Microsoft is reportedly experimenting on Windows 11 changes specifically for the Steam Deck and other PC handhelds.
An internal Microsoft presentation video leaked on Twitter by Walking Cat (@_h0x0d_) appears to be for a hackathon on "Windows Handheld Mode" that occurred in September 2022. The video explains that the Steam Deck and other PC handhelds are currently more popular than ever, but Windows is not optimized for them at all. Some applications cannot resize properly, the controls cannot navigate Windows, and the touch keyboard is inadequate, among other issues.
Microsoft employees took action to tackle the issues identified during the hackathon. They developed a tailored launcher that facilitates access to games, and revamped the touch keyboard with enhanced sizing and controller compatibility.
Moreover, they collaborated with the developer of an unofficial Steam Deck Windows Controller Driver to expand the reach of the controls across the Windows interface. Although Windows 11 still requires more extensive modifications to eliminate the need to constantly touch the screen, the outcomes of their efforts are evident. Additionally, there is a floating task bar in one of the screenshots that was teased last year.
The current progress of the project appears to be promising, although there is uncertainty regarding the eventual release and availability of these features for testing beyond Microsoft's scope. While handheld consoles that run on Windows have been in the market for some time now, the latest chips from both AMD and Intel are increasing their competitiveness and performance, bringing them closer to the level of full-sized PCs and gaming consoles.
Source: WalkingCat (Twitter), The Verge