New gaming-specific 7-inch device could arrive before Xbox 720

Microsoft is working on a 7-inch gaming tablet, according to “multiple sources”.
Several sources aware of plans within Microsoft’s Redmond HQ have told The Verge that initial hardware planning for an Xbox Surface has begun.

Specifications for an Xbox Surface 7-inch tablet computer leaked back in June ahead of Microsoft's Surface announcement. The news outlet says the final implementation of new Xbox tablet is being worked on now.
The Xbox Surface will reportedly include a custom ARM processor and high-bandwidth RAM designed specifically for gaming tasks. Its specifications could be altered to include an unannounced Intel SoC and it is apparently being developed to be independent of specific hardware architecture. The device won't run a full version of Windows, but a custom Windows kernel – Microsoft’s current Surface tablet runs an alternative OS called Windows RT.
This gaming-specific tablet is supposedly being developed using a secret hardware production process away from the companies that traditionally manufacturer Microsoft’s Xbox console. Xbox Surface will likely be manufactured at the same facility, however future Xbox consoles will be manufactured in mass quantities.