Ever since Sony jumped into the “death dance” with Nintendo in the portable market, everyone has been wondering when Microsoft would follow suit. Earlier this year, before official word of the Microsoft Zune HD surfaced, there were rumblings and even blurry cam shots of an Xbox handheld…the Zune X. The rumors were quickly squashed as the outlandish “specs” of the device were of those seen in high end netbooks, and all of the blurry cam shots taken we’re deemed Photoshop material. Even after all that, the Microsoft faithful have still not given up hope.

In a recent “project natal” related interview with Chris Morris from Variety’s gaming blog “The Cut Scene”, Robbie Bach, the president of Microsoft’s entertainment and devices division was asked (for what seems like the millionth time now) about Microsofts’s position in the portable market to which he replied:

“The portable market is important…You have to decide which direction the market is going, though. Is it going to stay with portable devices and continue to grow or is the phone you get going to be powerful enough to handle games? I’m probably more biased to think that [phones are] the direction the market is going.

So in the gaming space, you need to make a fork in the road decision on whether you’re going to do a portable device or focus on phones. The way technology is advancing with phones, [they are] going to be a very strong platform. The only think holding it back today is battery life”

With that said, it seems that Microsoft doesn’t want any part of the portable “hardware” market and probably leaning towards phones. The Zune HD isn’t the Zune phone (that some we’re hoping for) nor is it the gaming powerhouse that Xbox fans were waiting for.  Don’t be surprised however, if they do make a portable software mobile phone gaming platform.  Windows 7 mobile has been in production for some time with 6.5 just being released now, and it’s anyone’s guess if this is when we’ll see Microsoft enter the portable gaming market.