Microsoft to enter portable gaming market?

According to Business Week, Microsoft is considering to enter the portable gaming market in an attempt to challenge Apple’s iPod. In addition to playing music and videos, a Microsoft device would more than likely include games so Microsoft could leverage its successful Xbox brand.

“It can’t just be our version of the iPod,” says Xbox boss Peter Moore. This, however, would damage the market for players that leverage Microsoft’s secure WMA format and “Plays For Sure” badging. “Everybody will try to do their own thing to differentiate,” says Sim Wong Hoo, CEO of Creative Technology. “What Microsoft was trying to build will collapse.”

What would you think about an Xbox challenger to the iPod and PSP? Let us know in the forums.