Microsoft's Portable Plans: Hardware Or Simply Software?

One way or another, Microsoft wants a piece of the portable market. They already took the first steps, with a host of licensing agreements for portable versions of Windows, as well as the recently launched "Origami" UMPC devices, and they obviously want more! Rumours about a handheld Xbox have been circulating for some time now, but so far Microsoft officials have done nothing but deny any plans for developing such a device.

That is, until last week's conference organised by the Wall Street Journal in California, during which Bill Gates made some comments implying that Microsoft does have some sort of plans for pushing forward in the portable device space:

"We are looking at various ways to bring more to that space, (...) There is a lot yet that hasn't been done."

Was he talking about hardware? Or simply about developing software solutions for others' portable gizmos? Nothing is sure for now, though the "soft" approach would probably make more sense, since it would be pretty hard to drive people away from Apple's iPod, Sony's PSP or Nintendo's DS at this point.

Still, speculations regarding a future Xbox portable game console are far from over. In a recently published report by strategic research and consulting firm The Diffusion Group, titled "On the Future of Portable Game Consoles: Analysis & Forecasts", it's suggested that Microsoft will likely leverage its Xbox franchise to enter the portable game console (PGC) market in late 2007 or early 2008, with a handheld gaming platform that would also embed a portable multimedia player (similar to the PSP). It may turn out either way eventually. But for now, Microsoft seems to be playing the "soft" card.

(N.B. Archive text, links removed)