Microsoft set to become Microhard?

Microsoft's currently beavering away on a new handheld media entertainment gadget. Not to be confused with Microsoft's Origami, the company's forthcoming 'Ultra-Mobile' PC, this new piece of portable kit will provide games, music and video on the move, according to American site Mercury News, which quotes "sources familiar with the project" in its article.

It's mooted to resemble Sony's PSP in terms of functionality, with Microsoft planning to launch its own iTunes-style music service, codenamed 'Alexandria'. And as an indication of its commitment to the handheld cause, two of Microsoft's biggest Xbox cheeses, Robbie Bach and J Allard, are heavily involved with the project. Should Sony, Nintendo and even Apple be quaking in their boardrooms?

It's also suggested that the device, due within the next year or two, would pack enough tech to be able to play Xbox games. If that's true, then we'd love to see just how Microsoft manages to fuse the functionality of an analogue joypad with the slim appearance of a DS or PSP. Microsoft is yet to comment on the situation, but that won't stop you lot out there in forumsville letting your imaginations run riot. So get busy with the guesswork.