Xbox Handheld Mock Up .

We’ve long suspected that Microsoft’s development team is working on bringing a PSP-killing handheld Xbox into the world – so much so that the new issue of T3 magazine (on sale today) has an exclusive picture of what we think it’ll look like.

Rumours suggest the handheld will have a webcam and 5-inch touchscreen - that’s half an inch more than the PSP’s panel. And it will certainly be multitalented, as much at ease with movies, music and photos as it is with games. Heck, it needs to be in order to make people want it: in the words of Microsoft’s games bigwig, Peter Moore, “it can’t just be our version of the iPod.”
Games bible Edge – T3’s sister publication – recently quizzed Moore about the project. Xbox main man J Allard, normally not given to shunning the public eye, hasn’t been seen for months – surely this is because he’s working on the handheld?
Moore responded with a chuckling “no comment” – hardly the outright “no” that might have been expected, suggesting that Allard may indeed be overseeing the early development of a new portable console.

Whatever the case, it’s likely to be some time before such a device hits the streets – so in the mean time you’ll have to satisfy yourselves by feasting your eyes on the Xbox handheld Mock up above.