Last week we reported to you on the Sony filing for a touch screen device.  Since then, rumors have abounded concerning what the device will be.  The hottest claim going right now is that the device is a portable gaming console / phone.  This claim is substantiated only by a fairly suspicious-looking scan getting passed around the internet.  Click HERE for all of the alleged spec details!

According to Bungie’s own podcast, the now independent developer will make a wow announcement on Monday the 14th.  Coincidentally, this is the same day as the Microsoft press conference.  This has many speculating that another Halo is in the works after all.  Didn’t we finish the fight already?  Well, maybe we did and maybe we didn’t.  Either a Halo without Master Chief or a prequel could still fit the bill.

Also, a picture of a Master Chief-like character in a Fable II setting has been passed around from forum to forum.  Some seem to think he will make an appearance in Molyneux’s opus, but most feel it’s simply the product of a stellar user-generated character creator.

If renowned developer David Perry has his way, all PC (and console?) games will be free to play.  Due to the indelible mark being left on the PC gaming industry by piracy, drastic measures are needed.  David Perry, creator of Earthworm Jim, feels that free games funded by in-game micro-transactions and dynamic advertising are the way to circumvent the problem. 

In other words, if you want to maximize your experience you’ll have to shell out cash for upgrades and collectibles or be subject to more advertising.  Don’t believe it?  EA’s Battlefield Heroes and id’s Quake Live are both set to be totally free downloads funded by in-game advertising.

While firmware update 2.40 has already come and gone, we have learned that picture-in-picture (PiP) support of video chat for the PS3 will likely be announced at E3.

Not only will this be a cool way to communicate with friends and family from around the nation and the globe, but it will also be a cool way to play your favorite titles.  That’s right; video chat will be available in-game, not just while browsing through the XMB.

Capcom announced on the Sony PlayStation blog that Bionic Commando: Rearmed will be getting a “VERY cool surprise” for those who purchase the title through the PSN store.  This surprise should be announced at E3 and will be in addition to the already revealed Remote Play via the PSP.

Thanks so much everyone and we will see you all next week when we report direct from E3 in Los Angeles!