The Wall Street Journal reports that a new lineup of Surface tablets is in the works from Microsoft, including a 7-inch version. It’s not yet clear what form the new Surface might take, but the WSJ claims the 7-inch model will go into mass production later this year. The news follows Microsoft’s recent adjustment of the Windows 8 specification to allow for smaller tablets with a 1024 x 768 resolution. Microsoft has also begun work on a 7-inch tablet under the Xbox brand.

Microsoft only recently decided to move forward with a smaller tablet in response to products such as the iPad mini and Nexus 7.

Microsoft clearly it not out of the game yet by any shape of the imagination.