Microsoft has confirmed the existence of Zune, a brand-name that will eventually come to represent an entire line-up of portable media devices. The first device is said to be shipping this year, with more to come in 2007. At the moment, Microsoft seems to be attempting to draw attention to Zune's music and movie capabilities, which is no doubt an attempt to position the brand as a direct competitor to the iPod. This announcement (and the media blitz surrounding it) is intended to put a maximum amount of pressure onto Apple; mentioning Zune's gaming capabilities would dilute the "iPod killer" message that Microsoft is trying to plant in people's heads. Despite this, there are certain tidbits that we can extract from this official announcement that could influence how Microsoft's entry into portable gaming will play out.

Rumors about J. Allard's disappearance were true; he's emerged as one of three people heading the project, alongside Robbie Bach and Bryan Lee. Don't be surprised if J. Allard turns out to be the "face" of Zune, just like he was the "face" of Xbox 360. The drive-based and integrated WiFi aspects of the design as well as the community orientated software strongly suggest that the gaming device will feature Xbox Live Anywhere. What's still unclear is how Microsoft will market their portable gaming machine. With the introduction of a new brand name representing portable entertainment, how will this link to Microsoft's established Xbox brand? Are we talking "Zune w/Xbox" or will the portable gaming device be distinctly associated with one of the two brands, to the exclusion of the other? One way the two brands appear to share a connection is through their respective viral campaigns: they both feature rabbits (Origen, Coming Zune).

The overriding message conveyed by this announcement is that Microsoft is going out of its way to tackle the different portable entertainment markets on an individual basis. This approach contrasts sharply with Sony's entry into portable gaming. With the PSP, the company simultaneously took on the likes of the iPod, the Nintendo DS and more expensive video-only devices. As a result, the PSP has suffered from a degree of brand dilution which has resulted in the near failure of the UMD format and has limited the device's popularity as a gaming machine. By ignoring the gaming capabilities of the Zune (for now) and singling out the iPod and other portable media players, Microsoft is attempting to learn from Sony's mistake. Currently the Zune's immediate target is the iPod, and to some extent, future video-centric iPods, but when Microsoft finally decides to reveal the gaming capabilities of Zune, expect gaming to be singular focus.

This article was originally published on Joystiq.

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