The Technology is there to make a portable Xbox 360 (Sony's PS Vita is practically a portable PS3 and the Nintendo 3DS a portable Wii), so why has Microsoft still not challenged Nintendo and Sony in the portable arena? Microsoft's answer: the portable market is hard to crack.
Well, Microsoft could make a portable Xbox 360, but it doesn't want to because apparently "any dedicated portable device like a camera, or a portable gaming device like the 3DS has a tough time" says COO and CFO Dennis Durkin of Microsoft's Interactive Entertainment Business. Who said a portable Xbox would be a dedicated gaming device? The PSP and DSi, 3DS and PS Vita aren't, why would we expect a media rich platform like the Xbox to be a single trick pony?