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It would be pointless for MS to make a handheld geared fully towards gaming, PSP and DS are great and all, but that would leave MS in a position to innovate futher, so theres no point since they have like everyone else said pretty much, ZUNE HD, however if they had a handheld geared towards games like PSP and DS, they'd steal alot of grade A exclusives from both PSP and DS if they wanted to put risk on it.

but since thats not the case Zune HD is just fine.