Microsoft working on handheld device?

Microsoft Portable Mockup
Microsoft Portable Mockup

There has been rumors about Microsoft making a handheld to compete with the Nintendo Ds and Sony’s PSP for a while. But recently, Team Xbox has reported that Microsoft is in the final design stages of the new digital entertainment handheld. A handheld device that would feature Live Anywhere and have both gaming and entertainment (music, photos, videos) capabilities.

Microsoft was asked to answer today and they said that they are making new hardware and software for the Zune to release this year. They are scarce on the details, however. The device is codenamed xYz , and supposedly offers gaming and media playback. As well as internet capabilities, but no phone capabilities. One source said that this definitely isn’t a Zune phone, it is a converged device. Microsoft doesn’t want to compete with it’s Windows Mobile customers.

Microsoft certainly is working on Live Anywhere, anyway. And they’ve been rumored to be expanding their Zune device to compete with the iPhone and other handheld gaming devices. It shows that they have interest in the handheld gaming industry, that’s for sure. It seems that this can be a likely situation.

In any case,  a new handheld to be released would give them some ground breaking newsto reveal at the upcoming E3.

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