Microsoft is copying Valve and made a controller-friendly keyboard.
The gamepad keyboard is now in testing as part of the beta channel for Windows 11 and even includes button accelerators so you can use the X button for backspace, the Y button for spacebar, and the menu button on an Xbox controller to hit enter. The keyboard keys have also been vertically aligned, so it’s easier to type with a controller.
This new keyboard is similar to what Valve does on the Steam Deck, and one more step into making Windows 11 a handheld-friendly operating system.
It's a big step in the right direction and a sign that Microsoft is working on a better Windows-on-a-handheld experience. They still have much to do, and I'd argue the biggest missing feature is a Big Picture-like interface. But maybe we'll get that soon, too.