Xbox handheld is in development, claims author of Xbox book

Ellie Gibson 15:35 20/03/2006

J Allard said to be heading up new project

Microsoft's J Allard is currently working on a new project to develop
the company's first handheld console, according to Dean Takahashi, the
author of a forthcoming book about the launch of the Xbox 360.

In an article for the San Jose Mercury, Takashi claims that "sources
familiar with the project" have revealed that the new device will allow
users to watch movies and listen to music as well as play games. Unlike
the recently announced Origami tablet PC, the handheld's focus will be
solely to deliver entertainment.

Takahasi said that Xbox executive J Allard is heading up the project
together with Greg Gibson, who was system designer for the Xbox 360.
Finance chief Bryan Lee will oversee the business side.

Takahashi also claimed that chip manufacturer Transmeta has already
assigned 30 engineers to work on a "secret project" with Microsoft, and
that Transmeta has experience of reducing chip power so that they can
be used in handheld machines without causing too much of a drain on
battery life.

Apparently Microsoft also intends to set up an iTunes-style digital
music distribution service, codenamed Alexandria, and is currently
considering its options with regard to music technology.

According to Takahashi's sources, the new handheld will not appear on
shelves for at least a year, and possibly two, since those working on
the project have only been free to devote their time since they
finished work on the Xbox 360 in the autumn of last year.

Takashi is known to have high profile contacts within Microsoft - he
published a book chronicling the story of the original Xbox in 2002,
titled Opening the Xbox, and a similar book about the Xbox 360 is
slated for publication later this year.

Microsoft has yet to comment on Takahashi's claims. However, in
comments made earlier this year, Xbox boss Peter Moore hinted that the
company might consider developing a multimedia handheld - adding that
any such device "can't just be our version of the iPod."

__________________________________________________ _________________________

Monday, March 20, 2006
Microsoft's Plans For Handheld Game Player And "iPod Killer"

Dean Takahashi, 03:05 AM in Dean Takahashi, Gaming

Here's a story that came from reporting for my book, which is coming
out in May under the title "The Xbox 360 Uncloaked: The Real Story
Behind Microsoft's Next-Generation Video Game Console,"

In a bid to capture the huge audience for handheld entertainment
gadgets, Microsoft is designing a product that combines video games,
music and video in one handheld device, according to sources familiar
with the project.

The Microsoft product would compete with Sony, Nintendo and Apple
Computer's products,
including the iPod. And Microsoft has some of its most seasoned talent
from the division that created its popular Xbox 360 working on it. Game
executive J Allard leads the project, and its director is Greg Gibson,
who was the system designer on the Xbox 360 video game console. Bryan
Lee, the finance chief on the Xbox business, is leading the business
side of the project.

By anchoring its entertainment device as a handheld game player,
Microsoft is starting from its position of strength in the
entertainment business that it hopes Apple cannot match, even with its
iPod. The game press has dubbed it an "iPod killer,'' but its functions
would likely more closely resemble Sony's PlayStation Portable
multimedia gaming device.

While details are sketchy, the pedigree of the people in charge of
the business show how strategic it is to Microsoft's future.

"That would certainly be an interesting development in the market,''
said Anita Frazier, a game industry analyst at the NPD Group.

The other competitors have huge leads on Microsoft. But the Xbox
veterans have been underdogs for a while. Gibson, 35, is an electrical
engineer who joined Microsoft in 1997 to help design computer mice and
other hardware. He shifted to the Xbox division in 1999 to help design
the innards of the original Xbox. In 2002, he became the system
designer in charge of the overall design of the Xbox 360.

Allard, a 36-year-old progammer who became famous for prompting Bill
Gates to take the Internet seriously, commanded much of the hardware
and software teams who put together the Xbox 360. Lee, a longtime
entertainment executive, joined Microsoft as finance chief for the Xbox
a few years ago.

The approval of the project spurred the reorganization of the
leadership team in the Home and Entertainment Division in December. In
September, Robbie Bach, formerly the chief Xbox officer, was promoted
to lead the Entertainment and Devices Group, which combined the Xbox
with other mobile and entertainment businesses in one of four major
product groups.

Then in December, the jobs of the top Xbox executives were broadened
so that they could manage all of the businesses related to the broader
Entertainment and Devices Group, which included the Xbox business,
mobile devices, MSN, music, and home productivity software. Allard,
whose group designed the Xbox 360, was named to head "experience and
design'' for the entire group.

Sources say that the reason for the reorganization was to bring
Allard, Lee, Gibson and all of the relevant businesses into a single
group, which is supervised by Robbie Bach. The participation of these
highly regarded Xbox veterans suggests that Microsoft is very serious
about catching up with Sony's PlayStation Portable handheld game
player, Apple's iPod music players, and Nintendo's handheld GameBoy
Advance and Nintendo DS game players.

In the past, all of Microsoft's efforts to compete have fallen
short. The company considered making an ""Xboy'' game player a few
years ago but shelved the idea. It considered making a game handheld at
the same time it devised plans for the Xbox 360 in 2002 and 2003, but
it again decided to delay its entry.

Meanwhile, Microsoft's efforts in PocketPC handhelds and Portable
Media Players have fallen short in competition with the iPod. Last
week, Microsoft unveiled Project Origami, a handheld Windows computer.
But that device isn't targeted on pure entertainment as the Xplayer is.
The existence of these other projects suggests that there is still some
infighting within Microsoft about its best approach to portable

The handheld project is still in its early stages. Microsoft is
still figuring out which strategy to pursue in music technology,
according to sources familiar with the matter. The code name for its
music service, which would be the equivalent of Apple's iTunes, is

One benefit of waiting longer is that the handheld will likely have
sufficient technology in it to run a lot of original Xbox games from a
few years ago. Hence, it wouldn't be hard to create a new library of
games for the handheld.

Signs of activity have surfaced. Transmeta, a maker of low-power
chip technology, said last year that it had assigned 30 engineers to
work with Microsoft on a secret project. Transmeta's engineers work on
ways to take the power out of computing chips so that they can be used
in handheld devices with long battery lives.

In an interview with Business Week in January, Xbox corporate vice
president Peter Moore said "it can't just be our version of the iPod''
and added the Xbox brand "is an opportunity'' if Microsoft decides to
enter the mobile entertainment competition. He declined to comment on
the rumor about the handheld. But sources familiar with the project
confirmed its existence within the Xbox organization.

What remains to be seen is when Microsoft will launch the device.
Gibson may not need a large engineering team to run the project. But
his group of hardware engineers only became free last fall, when most
work on the Xbox 360 was completed.

It could be 2007 before the device hits store shelves. That gives
rivals such as Sony, Nintendo and Apple considerable time to
consolidate their position and come up with their own new gadgets in
the meantime.

The Mercury News strives to avoid use of unnamed sources. When unnamed
sources are used because information cannot otherwise be obtained, the
newspaper generally requires more than
one source to confirm the information.