Of interest: VentureBeat interviewed Robbie Bach, President, Entertainment & Devices Division here at MS, the group responsible for Microsoft games, hardware (like mice, keyboards and Surface), Zune, Mac software, Xbox 360 and more.
This is the first of several parts, focusing on Zune... and my boys are particularly interested in this answer...
Q: The Xbox guys showed a demo of games running on the Zune. It seems like a very timid way to launch games on the Zune. It is like dipping your toe in the water, seeing if hobbyists will create games on the Zune. Compare that to the major effort Apple has under way to put games on the iPod.
A: The way you have to think about it is to ask whether Zune is just a portable music player or a portable entertainment player. We think of it more as a portable entertainment player. The point of demoing games is to show that games can run on that entertainment platform. We didn’t demo games running on some big service because there isn’t some big service to announce. But the idea is that Zune does music, video, photos, and it has the hardware to do very compelling games on it. It is more compelling than an iPod because it actually has a D-pad. From a gaming perspective, it is reasonably well suited. You can read a little or read a lot into it. The point is that we think of it as a portable entertainment device.
Click here for the interview.