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Microsoft's portable system out this year?

Though the portable "Xboy" is still speculative, Bloomberg reported yesterday that Microsoft is launching a portable music and video player by Christmas to challenge Apple's iPod. From the article: "The digital player will have a wireless Internet connection, enabling users to download music without being linked to a computer, a feature the iPod doesn't offer, according to people briefed on Redmond, Washington-based Microsoft's plans."

Chris Kohler from Wired comments on the seemingly true nature of the video-music-sans-games device saying: "I find it odd that it won't play games, though; you'd think Microsoft, what with their whole department devoted to casual gaming, would at least want some basic portable time-killer type stuff in there."

Could this device be a sign of things to come from Microsoft on a portable gaming front?

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