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With the recent XNA announcements its pretty clear MS is *not* going to make a separate "XBOY" portable gaming device but will instead game enable WinCE and its offshoots.
Add in the new 3d capable PocketPC chips coming from Intel, ATI, and NVIDIA and the fact that Both snartPhone and Portable media center will now run 320x240 screens and you get the obvious answer that these devices will be game enabled.
Indeed, the pics of the Creative PMC prototype suggest a game capability might be in the box, judging by the placement of the buttons...
Kinda easy to tell MS to not do something they aren't going to do anyway, isn't it?
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