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Apparently, Microsoft is very serious about pushing hard into the tablet market, and this latest rumor seems to support that assertion. According to the latest intel, Microsoft if working on a 7-inch gaming tablet that will be called the XBOX Surface. Here's a quote with a few more details,
If this rumor turns out to be accurate, does this get your adrenaline pumping?The rumor is that the 7-inch Xbox Surface will feature a custom-built ARM processor, and a high-bandwidth RAM specifically chosen for games.
However the Xbox Surface is allegedly being developed neutral to the hardware, and it could also be powered by an Intel chip.
Don’t expect this to run full Windows. Instead, you are likely to get a custom kernel. It is not perfectly clear whether this would be a general-purpose device like the iPad mini, but it seems that while it may support messaging and other features, the gaming focus will be noticeable all around.
Manufacturing is happening in facilities where Microsoft is already building other products, but under higher secrecy. Some of the development is allegedly happening at Microsoft’s US offices.
Source: Phone Arena