Manufacturers have taken to compete in the 7 inch tablet market while Microsoft has taken their first steps with the Microsoft Surface in the larger screen category. But it looks like the company is not ready to stop there as they are said to be building a 7 inch gaming tablet which will be called the Xbox Surface.The hardware is reported to be in its final stages of development with a custom built ARM processor and a high-bandwidth RAM aimed at a great gaming experience. The report also suggest that Microsoft may also choose to use an Intel SoC instead as the Xbox Surface is being built independent of a specific hardware architecture.
The Xbox Surface will not run a full version of Windows, which makes sense for a gaming device. Instead it is expected to run a custom Windows kernel with messaging and other tablet functions included. We aren't certain if this will be software similar to Windows RT or closer to Windows Phone 8.
Manufacturing of the device is said to be happening by the same partners involved in building Microsoft's Xbox consoles while part of the development is taking place in special locked down locations within Microsoft.
There is no official confirmation if the Xbox Surface project will ever see the light of day, but if it does we can expect this tablet to appear in the market before the ‘Xbox 720’ console debuts.
source – The Verge