The Uncloaked, a new book by author Dean Takahashi which launched recently, reported to reveal that are currently plotting a brand new handheld system, currently being worked on by half of the 360 design team. The book claimed that the new handheld would launch half-way through the 360's cycle, and that MS were looking to smooth the ups and downs of the cycle in this fashion. Responding to this rumour, European Xbox boss Neil Thompson has refuted the book's claims, on the website of technology magazine T3.

"We're not even thinking about that at the moment. Handhelds, in the way you would think about a handheld like a PSP? No." So there you have it. Thompson explained that whilst no traditional gaming handheld would be forthcoming from Microsoft, the firm were working to improve their foothold in mobile phone gaming, Thompson explaining that it is "a really good opportunity to capitalise on the hundreds of millions of handsets that are out there, and give people a chance to connect that with other entertainment experiences."

More on this tittle-tattle as we get it.

By Luke Guttridge