Zune HD: Microsoft Handheld?

Recent speculation about Microsoft’s rumored entry into the handheld market finds tentative confirmation in the announcement of the Zune HD. The latest most advanced version of the Zune brand will have Wi-Fi capabilities and be integrated into Xbox Live as an extension of Microsoft’s service. The device is less auspiciously a handheld gaming console but Microsoft may be being very smart here, taking Apple’s approach to the market. By starting with an established multi-purpose device with gaming potential, the company can rely on the stability of a known quantity and later use it’s capabilities to graduate into the gaming arena.

It’s a clever approach and since handheld gaming devices are gradually becoming integrated with other technologies as multi-purpose phones, mp3 players etc. the market is more wide open and in general more forgiving since companies can borrow the popularity and demand of those other tchnologies while they develop their presence and viability in the handheld gaming industry.

The announcement is not a full fledged commitment by Microsoft but it’s reasonable to assume they’re eyeing the handheld market. This is a logical step in that direction and they’re not going to miss the opportunity to at least dabble in it. Microsoft has modestly stated in regards to the Zune HD “Gaming is a big opportunity for us.” No kidding.

As Patrick remarked on this week’s podcast with the NXE Arcade and community games marketplace being so well established the proposed integration to Live gives the system immediate access to an existing library of games.

With E3 at our doorstep it will be interesting to see how this develops.

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