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The handheld market is a unique one that I don't think MS could get into. Handheld games need qualities of both mobile and console games: easy to pick up, easy to play in short spurts, but with depth to warrant full attention, and substance to last for relatively large amounts of time. Nintendo has refined this a lot over the years and has a well rounded arsenal. I don't think MS at this point could get in given their focus, especially now that the handheld demographic and mobile demographic have split (again), leaving the potential market size back at around 75-85mil rather than the absurd 230mil of last gen. That's barely enough to support two. Three mean either everyone gets ~25mil or one dominates and the other two each get a fraction of the scraps (and we all know the latter is what would happen).

Now the demographics could change due to powerful marketing or a collapse of the mobile market, both of which could happen in the future. Disillusionment with the mobile gaming experience could also be a force to shift demographics as mobile games rely more and more on microtransactions and in app purchases. However, these are not guarantees by any stretch.

Basically, this would be a high risk, moderate rewards venture for the Xbox division. And with that division under the scrutiny of investors in the larger Microsoft brand, that kind of high-risk project could cause major problems. If they wanted in, they should have tried last gen when there were lots of new comers from outside the handheld demographic that could have been converted to any one of the brands. But now? No way.