Microsoft and Asus have been working together over the past year to create not one, but two new ROG Xbox Ally handhelds. Both of these Xbox Ally devices, part of the Project Kennan effort I reported on earlier this year, include a new full-screen Xbox experience on Windows that’s designed to be more handheld-friendly and hide away the complexity of Windows to focus on gaming instead.
The white ROG Xbox Ally is designed for 720p gaming, and the more powerful black ROG Xbox Ally X targets 900p to 1080p gaming on the go. Like the existing ROG Ally and Ally X, the new Xbox Ally and Xbox Ally X share the same 7-inch 1080p screen, complete with a 120Hz refresh rate and VRR support.
The Xbox Ally uses a previously unannounced AMD Ryzen Z2 A chip, combined with 16GB of LPDDR5X-6400 RAM and 512GB of M.2 2280 SSD storage. The Xbox Ally X upgrades the chip to AMD’s Ryzen AI Z2 Extreme processor, 24GB of LPDDR5X-8000 memory, and a 1TB M.2 2280 SSD.
All of these specs make them very similar to Asus’ existing Windows-powered handheld gaming PCs at heart, but there are some much-needed changes to the software side that could make the Windows handheld experience a lot better.
“We know that to take this handheld experience to the next level, we cannot do this alone,” says Shawn Yen, vice president of consumer at Asus, in a briefing with The Verge, admitting that some gamers have found it “frustrating and confusing” to navigate Windows with joysticks and button until now.
Microsoft and Asus have been collaborating closely on these two new Xbox Ally devices over the past year, and Yen says Microsoft and Asus “share a joint obsession” on these new handhelds.
That joint obsession includes Microsoft making good on its promise to combine “the best of Xbox and Windows together,” thanks to a new Xbox full screen experience on Windows that’s designed specifically for handhelds. Not only can the Xbox Ally devices boot directly to this interface, the companies claim you can easily get back to it using a new dedicated Xbox button on these handhelds — much like an Xbox console.
Microsoft doesn’t load the full Windows desktop or a bunch of background processes in this full screen Xbox experience, putting Windows firmly in the background and freeing up more memory for games. Instead, you launch straight into the Xbox PC app, which includes all of your PC games from the Microsoft Store, Battle.net, and what Microsoft calls “other leading storefronts.”
This aggregated gaming library means you’ll see games from Xbox, Game Pass, and all your PC games installed from Steam, Epic Games Store, and elsewhere in a single interface much like what the GOG launcher offers. Earlier this week we started seeing parts of this unified library appear in the Xbox PC app, and Microsoft says you’ll be able to access your full Xbox console library through Xbox Cloud Gaming or Remote Play to an Xbox console.
The idea is that you should be able to seamlessly launch any game you own, whether it’s actually installed on your handheld, streaming from your Xbox Series X over home Wi-Fi, or streaming from the cloud, though we have yet to try that ourselves.
Microsoft has also made some additional tweaks to the Xbox PC app and Game Bar to make this all more handheld-friendly, including the ability to log in via the Windows lockscreen with your controller, no touchscreen taps required. You’ll also be able to use this handheld-friendly Game Bar interface to easily launch apps like Discord, or alt-tab between apps and games, or adjust settings without having to fiddle with the touchscreen. You can read all about all the Windows changes in my deep dive look at this new Xbox PC experience right here.
These two Xbox Ally devices also have Xbox-like contoured grips. It’s as if Microsoft and Asus have taken an Xbox controller and squeezed a screen between the grips, similar to what Sony did with its PlayStation Portal. The grips have been designed like this to make it easier to wrap your hands around the entire controls, so you access all the buttons and triggers.
The Xbox Ally X even has impulse triggers like all modern Xbox controllers, so you’ll feel things like terrain of roads during racing games or the impact of bullets in a shooter, all thanks to the haptics on the triggers. Asus is also using a USB-C 4 connector that supports Thunderbolt 4 on the more powerful Xbox Ally X, offering the possibility of connecting a powerful external GPU to it, alongside a single USB-C 3.2 port and a UHS-II microSD card reader. The Xbox Ally uses two USB-C 3.2 ports instead.
Microsoft and Asus aren’t providing any benchmarks or a real sense of performance for these handhelds yet, and both use chips we haven’t tested. But interestingly, they appear to be focusing on battery life this time around.
“For this generation the most important thing to us is efficiency. Efficiency is our new superpower,” says Yen. “The games will be able to play cooler and quieter, and at the same time offer you a longer battery life for gameplay.” AMD told us in January that the Z2 Extreme would be both its most powerful and most efficient handheld chip yet, while the Z2 A is rumored to be based on the Steam Deck’s less powerful but battery sipping Van Gogh-based chip.
Importantly, the Xbox Ally is using a 60Wh battery, 50 percent larger than the pack that shipped in the original ROG Ally, while the more powerful Xbox Ally X uses an 80Wh battery, tied with the Ally X and the largest you can find in a handheld today. The Windows tweaks may also improve battery, with Microsoft claiming it’s already seeing 1/3rd the drain when these Xbox Full Screen Experience systems are idle and asleep.
If you want extra performance, you’ll also be able to dock these Xbox Ally devices to Asus’ XG mobile device that offers up an RTX 5090 laptop GPU to overhaul how games play on these handheld devices.
These new Xbox Ally handhelds will launch during the holiday season later this year, and Microsoft and Asus are planning to share pricing and preorder information in the coming months.
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![Mercor’s Brendan Foody calls out Sequoia over ‘dual-pricing’ valuation tricks | TechCrunch
In recent days, founders and founders-turned-investors took to X to share horror stories about being mistreated by VCs. Their complaints ranged from VCs falling asleep during pitch meetings to investors suggesting a founder fire a co-founder.
Brendan Foody, co-founder of the AI talent platform Mercor, which was last valued at billion, went so far as to call out Sequoia, arguably one of the most elite VC firms in the world.
“The “sequoia scam” is worse than a single horror story,” Foody wrote on X. “in the last 6 [months] ive seen a half dozen rounds where sequoia invests in 2 tranches. everyone pretends they only did the higher valuation. founders misrepresent this to their employees & then shop it to angels too.”
TechCrunch has previously reported on VCs investing in the same round at different valuations. Under this mechanism, the lead VC firm invests a significant chunk of its capital at a lower, preferential valuation, while putting a much smaller portion of capital in at a drastically higher price. The massive “headline” valuation that gets announced manufactures the perception of a dominant market winner, masking the fact that the lead investor’s actual average entry price was significantly lower.
The disparity can be stark. For example, when the AI-driven IT helpdesk startup Serval announced a million Series B at a billion valuation, the announcement didn’t tell the whole story. According to The Wall Street Journal, Sequoia’s actual lowest entry point valued the company at just 0 million — less than half the headline figure. The gap between those two numbers is the gap between perception and reality that Foody is pointing at.
Serval isn’t alone. At Aaru, a startup that uses AI to simulate user behavior for market research, lead investor Redpoint backed the company at a 0 million valuation despite an announced billion headline price.
Sequoia’s Shaun Maguire pushed back on Foody’s characterization directly. “TBH I have seen some of this behavior but I think it’s unfair to call it the ‘Sequoia scam,’” Maguire wrote in response to Foody on X. “This has happened approximately five times during my seven years at Sequoia. What happens is other investors are willing to pay a high price for a hot company — usually AI — at multiples above what we’re willing to pay. So we try to decouple the company-building relationship with our partner from the capital, and this leads to two tranches at different valuations in close succession.
“I’m not aware of anything shady here,” Maguire continued, “but if you’ve seen it I’d love to know. VC is a repeated game, so it just doesn’t make sense for us to try to mislead people. And if anyone has, I’d love to know. And in general, congrats on the success of Mercor — it was a miss for us.”
Maguire’s response frames the practice as a market reality rather than a deliberate maneuver — Sequoia, he suggests, is simply unwilling to pay what competitors will pay for the hottest deals, so it structures its participation differently. Whether that explanation fully holds up depends on a question Maguire doesn’t address: what founders are telling the people who don’t already know about the lower tranche.
Although Sequoia appears to use this pricing mechanism most frequently, Foody acknowledged it isn’t the only firm using this tactic. And while the dual-pricing structures certainly inflate a startup’s perceived worth and help attract top talent, calling the practice a “scam” may be going too far.
That’s because employee stock options should theoretically be priced based on the blended value of all tranches — not the headline number — according to Jason Woo, partner in valuation and financial modeling at Armanino, whose firm provides the independent 409A appraisals startups use to set option prices. A 409A is supposed to reflect a company’s fair market value, giving employees a strike price that’s insulated from whatever valuation gets announced in a press release.
There’s a catch: 409A valuations are widely understood to skew low. Because a lower strike price means a smaller tax bill for the company, there is a structural incentive to keep that number down. The appraisal that’s supposed to protect employees from an inflated headline valuation is also, by design, not trying particularly hard to reach the top of the range.
The angel question is more complicated. Unlike employees, angels are writing checks, not receiving options. There is no independent appraiser standing between an angel investor and whatever number a founder chooses to share.
The dual-pricing structure is just one of way VCs and founders game the perception of success in a hyper-competitive market. Another, more pervasive tactic involves manipulating or outright overstating annual recurring revenue (ARR).
The VC Niko Bonatsos, a longtime veteran of General Catalyst who more recently founded Verdict Capital, addressed this issue during one of TechCrunch’s events in Athens last month. “We [at Verdict] mostly invest before metrics, before product, before the company [has fully taken shape] but I do have a past portfolio, and sometimes the conversations are telling. I’ll get a call or an email with a very high ARR number. I’ll think: I didn’t remember that company doing so well. So I reach out to the founder: ‘What happened? Why are the numbers so strong?’ And the answer is: ‘Oh yeah, it’s 365 times the revenue we made yesterday because one of our campaigns hit.’ So yeah, some of these terms have lost meaning.”
Foody declined to comment further. Sequoia didn’t immediately respond to a request for comment.
— With additional reporting from Connie Loizos
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.#Mercors #Brendan #Foody #calls #Sequoia #dualpricing #valuation #tricks #TechCrunchMercor,Sequoia Partners,Valuations](https://i2.wp.com/techcrunch.com/wp-content/uploads/2024/11/GettyImages-1258486979.jpg?w=1024&ssl=1 "Mercor’s Brendan Foody calls out Sequoia over ‘dual-pricing’ valuation tricks | TechCrunch
In recent days, founders and founders-turned-investors took to X to share horror stories about being mistreated by VCs. Their complaints ranged from VCs falling asleep during pitch meetings to investors suggesting a founder fire a co-founder.
Brendan Foody, co-founder of the AI talent platform Mercor, which was last valued at billion, went so far as to call out Sequoia, arguably one of the most elite VC firms in the world.
“The “sequoia scam” is worse than a single horror story,” Foody wrote on X. “in the last 6 [months] ive seen a half dozen rounds where sequoia invests in 2 tranches. everyone pretends they only did the higher valuation. founders misrepresent this to their employees & then shop it to angels too.”
TechCrunch has previously reported on VCs investing in the same round at different valuations. Under this mechanism, the lead VC firm invests a significant chunk of its capital at a lower, preferential valuation, while putting a much smaller portion of capital in at a drastically higher price. The massive “headline” valuation that gets announced manufactures the perception of a dominant market winner, masking the fact that the lead investor’s actual average entry price was significantly lower.
The disparity can be stark. For example, when the AI-driven IT helpdesk startup Serval announced a million Series B at a billion valuation, the announcement didn’t tell the whole story. According to The Wall Street Journal, Sequoia’s actual lowest entry point valued the company at just 0 million — less than half the headline figure. The gap between those two numbers is the gap between perception and reality that Foody is pointing at.
Serval isn’t alone. At Aaru, a startup that uses AI to simulate user behavior for market research, lead investor Redpoint backed the company at a 0 million valuation despite an announced billion headline price.
Sequoia’s Shaun Maguire pushed back on Foody’s characterization directly. “TBH I have seen some of this behavior but I think it’s unfair to call it the ‘Sequoia scam,’” Maguire wrote in response to Foody on X. “This has happened approximately five times during my seven years at Sequoia. What happens is other investors are willing to pay a high price for a hot company — usually AI — at multiples above what we’re willing to pay. So we try to decouple the company-building relationship with our partner from the capital, and this leads to two tranches at different valuations in close succession.
“I’m not aware of anything shady here,” Maguire continued, “but if you’ve seen it I’d love to know. VC is a repeated game, so it just doesn’t make sense for us to try to mislead people. And if anyone has, I’d love to know. And in general, congrats on the success of Mercor — it was a miss for us.”
Maguire’s response frames the practice as a market reality rather than a deliberate maneuver — Sequoia, he suggests, is simply unwilling to pay what competitors will pay for the hottest deals, so it structures its participation differently. Whether that explanation fully holds up depends on a question Maguire doesn’t address: what founders are telling the people who don’t already know about the lower tranche.
Although Sequoia appears to use this pricing mechanism most frequently, Foody acknowledged it isn’t the only firm using this tactic. And while the dual-pricing structures certainly inflate a startup’s perceived worth and help attract top talent, calling the practice a “scam” may be going too far.
That’s because employee stock options should theoretically be priced based on the blended value of all tranches — not the headline number — according to Jason Woo, partner in valuation and financial modeling at Armanino, whose firm provides the independent 409A appraisals startups use to set option prices. A 409A is supposed to reflect a company’s fair market value, giving employees a strike price that’s insulated from whatever valuation gets announced in a press release.
There’s a catch: 409A valuations are widely understood to skew low. Because a lower strike price means a smaller tax bill for the company, there is a structural incentive to keep that number down. The appraisal that’s supposed to protect employees from an inflated headline valuation is also, by design, not trying particularly hard to reach the top of the range.
The angel question is more complicated. Unlike employees, angels are writing checks, not receiving options. There is no independent appraiser standing between an angel investor and whatever number a founder chooses to share.
The dual-pricing structure is just one of way VCs and founders game the perception of success in a hyper-competitive market. Another, more pervasive tactic involves manipulating or outright overstating annual recurring revenue (ARR).
The VC Niko Bonatsos, a longtime veteran of General Catalyst who more recently founded Verdict Capital, addressed this issue during one of TechCrunch’s events in Athens last month. “We [at Verdict] mostly invest before metrics, before product, before the company [has fully taken shape] but I do have a past portfolio, and sometimes the conversations are telling. I’ll get a call or an email with a very high ARR number. I’ll think: I didn’t remember that company doing so well. So I reach out to the founder: ‘What happened? Why are the numbers so strong?’ And the answer is: ‘Oh yeah, it’s 365 times the revenue we made yesterday because one of our campaigns hit.’ So yeah, some of these terms have lost meaning.”
Foody declined to comment further. Sequoia didn’t immediately respond to a request for comment.
— With additional reporting from Connie Loizos
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.#Mercors #Brendan #Foody #calls #Sequoia #dualpricing #valuation #tricks #TechCrunchMercor,Sequoia Partners,Valuations")
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