Microsoft's next move in the gaming world has been subject to speculation for some time. With all three major consoles on the market doing reasonably well and showing no signs of slowing, their focus has been improving the living room experience from a hardware standpoint - developing things like Project Natal. They do intend to expand to other platforms eventually, however, and in a recent interview Microsoft's Corporate VP Shane Kim particularly referred to the portable market.
For Kim, it's just a matter of time before a mobile Xbox device becomes available. Although he claims they still don't know if they'll build their own gaming handheld or go the Windows Mobile route, earlier rumors suggest the company might already be working on a portable device that sits somewhere in-between the Xbox and Zune. Facing off the likes of Nintendo's DS and Sony's PSP, Microsoft would have to make a very grand entrance if they want to stand any chance of impressing people.
Will it happen? He certainly thinks so, believing that their existing strengths can play a note of future success with their mobile endeavors. They will capitalize on the power of Live, believing they can provide a high level of integration with online services people won't want to pass up.
Very few details aside from their intentions to enter the mobile gaming market were mentioned, but the interview itself is very revealing about how Microsoft is operating in the gaming space.