It’s been a long, long time coming but if the rumors are true the next handheld system from Nintendo may get a significant performance boost thanks to the Tegra in the form of the tentatively named Nintendo TS (Tegra System?).  Yup, that’s right, the same multi-core ARM based chip that powers the new Zune HD could give Nintendo a portable system that is on par with the Wii in terms of processing power and graphics output.  Moreover, it could actually compete with the feature set of its closest rival, the PSP.

The news gets even better when you consider that the previous generations of DS hardware were based around 16 and then 32-bit ARM cores, making the leap to Tegra painless and, very likely, backwards compatible, which everyone apparently loves.

If true, this design win for the Tegra chip would mean a huge boost in revenue for Nvidia knowing that they power the new version of Nintendo’s 100 million selling DS system.

Conversely, this could be dire news for Microsoft if it ever plans on getting into the handheld market with their Zune hardware.  The Zune HD currently uses the same Tegra chip and therefore is currently sitting idly on the processing honchos to deliver a great gaming experience.  That is, of course, if MS can ever get off it’s backside and integrate the Xbox Live Arcade into the Zune and vice versa.  Delay too long and Nintendo will swoop in with a Tegra of it’s own and a long history of success in the handheld market to swing around like a 10 ton hammer.

The handheld market just got a whole lot more interesting for me.  Look for this rumored device to land sometime in late winter of 2010.