It's no surprise Microsoft is flirting with the idea of jumping into the handheld market. While the company has found success with the Xbox 360, Microsoft has absolutely no portable presence.
With all this time outside of the market, Microsoft needs to identify what kind of portable system the company's handheld Xbox will be. We told you about rumors of a Zune-Xbox-cell phone hybrid, but such an ambitious device will be expensive and alienate those who just want a portable gaming system.
Microsoft executive Shane Kim recently told Kikizo that Xbox Live is the "connective tissue" that will tie together the company's devices. How that tissue is implemented into a portable device will probably be one of the biggest incentives in owning a handheld Xbox. We'd imagine this connectivity would allow for the transfer of digital media (movies, TV shows) bought on the Xbox Live Marketplace. Better yet, we'd love to see all Xbox Live Arcade games feature an "on-the-go" mode as well.
Hardware speculation aside, we can't imagine Microsoft releasing such a device anytime soon. With game sales struggling due to a weakened economy, introducing brand-new portable hardware may not be the wisest of decisions. Even if Microsoft could keep the price around $150 and promise original Xbox-like graphics, would you consider purchasing a new portable system in the near future? What other features would you like to see from an Xbox handheld?