Microsoft acknowledges their limitations. I can definitely see how thats a smear upon their reputations. The reality is the hand held market is only going to get more cut throat over time not less cut throat. So unless you are prepared to loss lead hardware, spend huge sums on exclusive development, and have a resolution to the cell phone paradox it probably is better to avoid yet another uphill battle.
Every company needs to choose their battles carefully, and choose what are the most promising. I think Microsoft has a pretty solid understanding of exactly what it would entail to break into the hand held market. They really are better off developing live then a new hand held. They can parlay that into the hand held market at a later date as an operating system for cell phones. Which is what consumers really want. The all in one gadget play games, listen to music, take calls, and use it as a PDA. The only thing really standing in the way is the price.
I am waiting for one of those all in one devices that does everything and has one of those paper thing screens that rolls up. Better to have a all in one gadget, and simply download the games to play.
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