RUMOR: Microsoft developing Zune-Xbox handheld gaming device

In an economy that is affecting almost everyone, especially major companies, handheld devices such as Nintendo's DS and Apple's iPhone seem to be doing pretty well for themselves within the gaming market. Rumor has it that Microsoft is working to throw their own handheld device into the ring, a device that will feature Live Anywhere and is intended to be a mix of the Xbox 360 and the Zune phone.

However, as Team Xbox reports, the device codenamed xYz, will not have phone capabilities, but will offer gaming, media playback and Internet connectivity with a plethora of options from Live Anywhere.

While this is indeed still just speculation, with the DS and DSi sales topping over 1.04 million last April, it doesn't seem inconceivable that Microsoft would be mighty interested in entering the handheld market. If fact, it'd be pretty silly if they didn't. But, then again, Sony's PSP has been suffering in the days of late, so perhaps Microsoft is wise to hold off until the market is just right for whatever product they may or may not be working on.

Check out the original article here at Team Xbox.