Microsoft working on portable music and gaming device?

by: Chuck -
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BusinessWeek is reporting that Microsoft is considering development of a mobile entertainment device to compete with the Apple iPod and the Sony PSP.  The problem is that Microsoft has been licensing technology to enable this to some of their partners and forging ahead on something like this would step on a lot of toes.  That said there is some potential here for Microsoft to do something interesting, especially if they were to leverage Xbox Live Arcade on the device (portable Geometry Wars would be hella-sweet).
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