Potato Chase controls pretty smoothly with the Zune Pad. You push slightly on any edge and it moves you forward, backward, left or right. Click the middle, or any of the edges, and it fires a bomb toward your adversary. You can host a game, or join a game wirelessly with up to eight other players. While it is a primative demo, there was a minimal amount of slowdown while playing with two other people. There's also an API feature that uses album art to build the walls of the battle arena, however it wasn't functional on the demo units. Pretty cool stuff from the XNA team.

Microsoft's J Allard told Reuters that gaming on a portable music player has been done before, but badly (undoubtedly pointing to iPod games), so it's a tricky proposition for them to do well—meaning they'll have to figure that out first before diving in. As for the Zune phone, they're focusing on getting the music and video part down first before tacking on other functionality. However, both are a possibility, because the new Zune OS is built on top of Windows CE, the underlying technology for Windows Mobile and Gizmondo. [Reuters]