"Xplayer" supporting Xbox games may not be out of the question just yet, and it may well target Sony, Nintendo AND Apple

As you might have expected even before its official announcement, Microsoft's "Origami" project didn't turn out to be the "portable Xbox" console that news reports speculated it to be. However, San Jose Mercury News reporter (and the author of "Opening the Xbox") Dean Takahashi believes a new portable project currently known as "Xplayer" is in the works at Microsoft. Signs are pointing to the device being a video game console with additional support for music and video playback.

A few former Xbox executives (including J Allard and Bryan Lee), and Xbox 360 system designer Greg Gibson are reportedly attached to the project:

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.

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.

Takahashi's article suggests the project could become reality and appear on store shelves by 2007, so the project would have to be in a very early stage at this point. Microsoft is reportedly keen on having the portable support many current-generation Xbox games to maximize the Xplayer's potential gaming library.