In a very timely article (considering the recent news concerning Nintendo) BusinessWeek online brings us some insider information on a possible Microsoft branded portable digital media device. Sources inside the company suggest that Microsoft has put together a team that's considering the business end of an initiative to unseat Apple's iPod. Based on previous commentary by Xbox boss Peter Moore, the device would play games alongside music and videos, in an attempt to differentiate it from the multitude of "iPod beaters" (and failers).

If Microsoft goes ahead with such a device, it'll have to ask itself whether or not it wants to include it as part of the Xbox family. As BusinessWeek puts it, "If the new device comes with the Xbox brand, most consumers will view it as a game player, like Sony's PlayStation Portable. That might limit its appeal, since the portable gaming market is much smaller than the one for digital media." In the past Sony have confused us over the intended purpose of the PSP, so it's likely an Xbox-to-go would suffer similarly. Trying to simultaneously master the portable music and video player market alongside the portable gaming market is not an easy task.

If Microsoft decides to go ahead with a portable games machine (we mused about this possibility a couple of months ago) the next few years will be very interesting indeed for portable gaming.

[Image credit goes to Playbomb]

This article was originally published on Joystiq.

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