Microsoft talks ZuneHD and Xbox Live compatibility

We've been following the saga of Microsoft's rumoured Zune relaunch with the ZuneHD, including the possibility of cross-compatibility with Xbox Live - which we'd all hoped included the ability to play XBLA games on the handheld device.

Well, Microsoft has finally come out of the closet regarding ZuneHD, though as yet there's only a hint at its gaming capabilities..

The US is to receive the ZuneHD handheld this Autumn, which promises to be the first device to include an HD radio receiver and HD video output, along with an OLED touchscreen, wi-fi and an internet browser. No phone, though.

For the rest of the world, it seems that for the time being, Zune is simply being used as a rebranding and expansion of Xbox Live's video services - presumably to promote awareness of the brand across territories where the original media player was never released.

“The Zune experience is growing beyond a music player in the U.S. Zune’s international expansion starts with video on Xbox LIVE; eventually we’ll offer the full digital entertainment experience spanning screens, devices, platforms and geographies,” says Chris Stephenson, general manager of consumer marketing for the TV, video and music business.

“Delivering on Microsoft’s connected entertainment vision; this news marks a turning point for Zune as it brings cross-platform experiences and premium video content to living rooms around the world.”

The official press release pretty much repeats itself over and over regarding the Zune Xbox Live video service, apparently looking to provide the same streaming, rental or downloaded audio/video content to the TV, PC and the ZuneHD mobile device.

We suspect Microsoft is saving up the gaming announcement angle for E3, as it'd be a seriously missed opportunity if the Zune HD wasn't going up against the iPod touch after all this work is going into the expansion of Microsoft's multimedia living room domination.

A hint is made regarding how ZuneHD "integrates into Xbox LIVE to create a game-changing entertainment experience," though no further announcements are expected on this front until E3. Sounds very promising, though.

Keep an eye on Pocket Gamer for further revelations on ZuneHD: we suspect ithey're just around the corner...