Microsoft said to be working on 7-inch Xbox tablet

Confidential sources close to Microsoft revealed the existence of a 7" Xbox Surface tablet to The Verge. This gaming device reportedly uses a custom ARM processor and high-bandwidth RAM, although the sources revealed that the specifications could be altered to accomodate an unannounced Intel SoC. The Xbox Surface is said to be in the works independent of specific hardware architecture, it runs a custom Windows kernel and while the focus is on gaming, it also features messaging and other tablet functionality.

Microsoft has developed a secret hardware production process for its Surface tablets that is separated from partners that traditionally manufacturer the company's Xbox console. We're told that the Xbox Surface will likely be manufactured in the same factory, but that any future "Xbox 720" console will be manufactured in mass quantities by companies like Pegatron or Foxconn.

We've learned that part of the Xbox Surface is being developed at Microsoft's offices in Silicon Valley. The software giant recently locked down several Xbox-related buildings, limiting employee access to the company's Interactive Entertainment Business division. The lock down is likely related to Microsoft's increased testing of the tablet, providing a way for other parts of the Xbox team to build games and software for the device.