Xbox 360 team at work on portable - Takahashi

Author Dean Takahashi has claimed in his new book, The Xbox 360 Uncloaked, that half of Microsoft's Xbox 360 hardware team has moved onto a portable hardware project - designed to compete with Nintendo's DS and Sony's PSP - since the launch of the next gen machine.

Takahashi claims the team was split in two following the launch, leaving the other half to work solely on reduced production costs of Xbox 360.

According to the writer, the portable is planned to be released halfway into Xbox 360's lifespan, a strategy to assuage the crippling costs of moving through hardware cycles. Sony, obviously, has employed a similar approach with PS2 and PSP.

A Microsoft gaming handheld has been long-rumoured, the latest occurrence adding fuel to this particular fire being the release of a movie for the company's Origami project. A promotional video for the handheld PC showed Halo 2 running on its screen.

Future-gazing aside, Takahasi's book contains a wealth of insider information on the creation of Xbox 360 and the team responsible for the project, including details on the departure of Ed Fries, Microsoft's VP for game publishing; the machinations surrounding decisions to work with the likes of nVidia and Intel with Xbox 360; and Microsoft's internal reaction to the announcement of PlayStation 3's Cell processor.

Watch this space for a full review of The Xbox 360 Uncloaked.