Sounding too good to be true, the cats at Teamxbox have posted a lengthy piece quoting multiple sources from Redmond and Santa Clara who anonymously spill the beans on what the Zune HD is and isn't. The "digital entertainment handheld," dubbed unanimously as product "xYz" by said sources to emphasize its purpose of bridging the Xbox and Zune platforms, is not a phone (that's Project Pink) but a converged "mashup" of devices like the Sony Mylo, PSP, and iPod touch. The emphasis of the device is not the hardware but the software, services, and entertainment experience if offers while remaining primarily "a portable game console and media player." It's said to link into Microsoft's Skybox computing services for mobiles and blur the lines between Xbox Live and the Zune and Sky Marketplaces. Even the Xbox 360's NXE interface will be making its way onto the new Microsoft handheld. As Teamxbox summarizes:



Buy a song, a movie or a TV show on your Xbox, play the content later on the handheld or the other way around. Play an Xbox Live Arcade game either on your Xbox or in this handheld.



At the moment, we have no way to authenticate any of this beyond what we've brought to the table already. Honestly, having had our hopes crushed by a tepid reaction to market trends from Microsoft in the past makes it difficult to believe all these seemingly fanboi fantasy claims of specs and convergence . However, if true, if Microsoft finally breaks free from the rigid silos of its own making and delivers an integrated living room, gaming, and portable media experience along with a stable Windows 7 computing environment... well, wait this just can't be happening.[Via wmpoweruser and SlashGear