Dean Takahashi has a very few new morsels of information about Microsoft's attempts to enter the handheld gaming market.

Business Week first broke the story back in January and Microsoft immediatly responded with a vague statement that seemed to address an entirely different story.

Today's Mercury News story cites "sources familiar with the project" and says that J Allard, Greg Gibson and Bryan Lee are all involved in the project which hopes to get the device to market by 2007.

Personally, I think Microsoft should focus on concreting their console and not fracture their resources. Look what the PSP did to Sony.

Microsoft Plans for Handheld Game Player and iPod Killer [Mercury News]