There's been recent speculation that Microsoft (MSFT +2.95%) is planning on launching a new 7-inch tablet to add to its Surface brand of devices. This new device is allegedly going to be called the "Xbox Surface" and geared heavily toward gaming uses. Microsoft has a strong position in the gaming market, which it could easily leverage to boost a 7-inch model. This particular tablet is said to run on Intel (INTC 9.07%) chips. All of its main competitors now have both small- and full-sized tablet offerings. Amazon.com (AMZN +1.48%) has the Kindle Fire HD and 8.9-inch Kindle Fire HD, Apple (AAPL +1.72%) has the iPad Mini and iPad with Retina display, while Google (GOOG +1.11%) offers the Nexus 7 and Nexus 10. A competitive response in the 7-inch arena makes perfect sense.