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In an interview with Kikizo (via Game Stooge), Microsoft corporate vice president Shane Kim made the strongest direct comments yet about their plans in the portable gaming space, calling it not a matter of if, but a matter of "when."

"For us, it's a matter of focusing on 'when', because if we chased after a mobile or handheld opportunity, we would not have the resources and ability to do things like... Project Natal," said Kim, in response to whether he sees room for the Xbox brand in portable gaming in the future. "So we've chosen to focus on the living room experience from a hardware standpoint, if you will, but we're building a service in Live that will... will extend to other platforms. No question about it."

Well, except for one question: "So the question will be, how do we enter into that market -- do we do our own device, do we create our own phone -- that's a question for the company itself," Kim said. "Do we continue to go down the Windows Mobile path, which is that path that we're on today, etcetera, etcetera. But believe me, we understand the importance of that device in people's lives. And the more we make Live about valuable service and add more content, and add more ways to connect with your friends through it, we're going to need to make sure that it's on all the important platforms in people's lives, including PC."

So by the sound of it, it doesn't seem like an actual "Xbox Portable" is a forgone conclusion yet -- only the fact that the Xbox brand, likely the Xbox Live brand in particular (which Kim called the "connective tissue") will become portable in some way in the future (which is, as Kim also noted, something they've promised as far back as 2006, when they first announced the concept of "Live Anywhere"). As to what shape that takes -- their own standalone gaming device, or existing portable devices like Zune -- remains to be decided.