The Xbox Ally is a recently released model (October 2025) featuring the new AMD Ryzen Z2 A CPU, 16GB of LPDDR5 RAM, and a 512GB SSD. The Asus ROG Xbox Ally (non-X) model is equipped with a newer generation Ryzen Z2 A processor, which is comparable in performance to the Steam Deck's APU. Although not nearly as powerful as the Ryzen Z2 Extreme found in the Xbox Ally X or even the Z1 Extreme in the older ROG Ally X, it's also considerably less expensive.
The nomenclature might be confusing, but the Xbox Ally is really more of an evolution of the the Asus ROG Ally handheld than it is an actual Xbox console. Jacqueline Thomas sums it up quite well in her Xbox Ally X review:
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