The most notable difference between the Xbox Ally and the Steam Deck is the operating system. Like the ROG Ally, the Xbox Ally will also use Windows 11, while the Steam Deck uses Valve's SteamOS.

ROG Xbox Ally dives deep into a new feature that suggests the Windows handheld may have taken a page out of Steam Deck’s book.

During Gamescom 2025, Xbox revealed a new Handheld Compatibility Program for its Xbox Ally and Xbox Ally X. It's potentially a more robust system than Steam Deck verification.