I was wondering when this rumor was actually going to see some artist renderings. Not that it would be uncool, codename “xYz” would combine the MP3 awesomeness of a Zune and the gaming glory of an Xbox 360. Here’s a mystery quote:
The project, codenamed “xYz,” is said to feature a WVGA touchscreen and a way to play music and movies on both the device as well as the Xbox 360. Basically, it’s going to be a connected handheld gaming system with rich multimedia features.
I think it sounds like a good idea and it would garner some serious attention as Microsoft is a stable name in the video game industry nowadays. I doubt the ability to make 360 hardware that small and is it maybe too little, too late? We’ll see if we hear anything again about this.