MSFT thinking about a portable Xbox?

Microsoft is no stranger to portable electronics; they've been providing software that runs many of them for years, only to see their offerings trounced by Apple's unstoppable iPod and now Sony's multimedia maven, the PSP. BusinessWeek is reporting that Microsoft is now considering entering the arena themselves, with a multimedia device that would incorporate gaming. Peter Moore, though not confirming that they are planning such a product, saying that "any Microsoft media device would have to leverage the company's most significant consumer strength, video gaming."

Would the portable device be an Xbox and not just a PocketPC PDA with enhanced gaming functionality. Moore says about the Xbox brand, "It can't just be our version of the iPod... I think the brand is an opportunity."

There are risks in this approach however: they risk falling into the same niche that the PSP occupies, which is finding consumers to be far less accepting of its broad range of features, instead seeing it only as a gaming device; or of alienating their current hardware partners who may view Microsoft, with complete control over the software, as unfair competition.

[Thanks, Neural]