Of the three major console manufacturers, Microsoft is the only one who doesn't have their own handheld gaming platform. They'd like to join that party, though.

"For us, it's a matter of focusing on 'when', because if we chased after a mobile or handheld opportunity, we would not have the resources and ability to do things like Project Natal," Microsoft Corporate VP Shane Kim told Kikizo. "So we've chosen to focus on the living room experience from a hardware standpoint, if you will, but we're building a service in Live that will... will extend to other platforms. No question about it."

Kim added that Xbox Live would be the "connective tissue" for any foray into handheld gaming. It's not clear what form an Xbox handheld device would take, though. "So the question will be, how do we enter into that market - do we do our own device, do we create our own phone - that's a question for the company itself - do we continue to go down the Windows Mobile path which is that path that we're on today, etcetera, etcetera."

There's been over 50 million PSP's, 100 million DS's sold worldwide since the two devices were released in 2004. Microsoft's competitor in the PC market, Apple, has cracked into handheld gaming with the iPhone in 2007 and now 21 million people own the device.