E3: Microsoft denies working on "Xboy" handheld

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In his new book, "The Xbox 360 Uncloaked", Dean Takahashi claims that
half of Microsoft’s original Xbox 360 hardware team are currently
working on a portable handheld console to rival the PSP and DS. The
rumoured handheld device would, according to Takahashi, emerge halfway
through the Xbox 360’s life-cycle.

The other half of the hardware team
are currently working on bringing down Xbox 360’s hardware costs. J
Allard’s non-appearance at E3 this year also fuelled speculation that
the Xbox exec’s hard at work on a handheld, but Neil Thompson, head of
Xbox Europe, denied Microsoft was working on such a device, telling T3
Magazine: "We’re not even thinking about that at the moment. Handhelds,
in the way you would think about a handheld like PSP? No."

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