Is Microsoft Working On An Answer To The DS, PSP, IPhone?

Team Xbox is reporting that Microsoft is in the final design stages of a new digital entertainment handheld, one that would feature Live Anywhere and blur the lines between the Xbox 360 and Zune.

We've emailed Microsoft for comment and will update once they reply.

The device, codenamed xYz, is said to offer both gaming and media playback as well as internet connectivity, but no phone.

"Although the Microsoft handheld is definitely a converged device, this is not a Zune Phone." The source added: "Microsoft won't compete with its Windows Mobile customers."

Rumours of Microsoft expanding their Zune device to be more competitive with the iPhone and portable gaming devices have been circling for quite awhile. And Microsoft is certainly still working on Live Anywhere.

When I spoke with Microsoft's Larry "Major Nelson" Hryb during PAX last year he said it was still being worked on and Microsoft mentioned it at last year's Electronic Gaming Summit, very briefly.

Maybe this is the hold up? It would certainly give Microsoft something else to talk about at E3 later this month.

Microsoft Working on Digital Entertainment Handheld [Team Xbox]


    If I could play XBLA games on it, I'd buy it for sure.

    After I left my 60Gb Creative Zen Vision:M on a plane to China, I've stepped into the market to find that only Ipod makes anything with a considerable hard dive. I will never buy one. So, I'm stuck until I can actually get a Zune in my country. This with at least 60Gb I would buy in an instant.

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