Game capable smartphones, and their application stores, are one of the hottest and fastest growing areas of technology at the moment. And the growth potential is pretty close to infinite. They are a perfect synergy of abilities that will bring as yet unimaginable capabilities to huge swathes of the human race.

There are two ways to be a platform holder in this market. You can manufacture a device yourself, as Apple do with the iPhone. Or you can license the platform to others, as Google do with Android. Microsoft do both and they do them both badly.

The device they manufacture is called the Zune. It is an OK piece of hardware but it is not going anywhere because it doesn’t do anything special. In fact there is an immense amount that it doesn’t do. The platform they license out is called Windows Mobile. A workman like piece of software but two generations behind when stacked up against the competition.

So Microsoft are making excuses. Shane Kim, Microsoft Corporate VP, says: “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. 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.”

This is pathetic. Microsoft has about 90,000 employees. And they can’t develop a decent mobile platform because they are all too busy with Natal. When a decent mobile platform is worth billions in profits. Just ask Apple.

What makes this doubly pathetic is that Microsoft, above every other company on planet earth, are sitting on the technology to do this. The have the Surface gesture interface, the Xbox Live portal, the Office applications, the Explorer browser, Outlook for email and the Windows Mobile operating system. What more do they want?

What makes this triply pathetic is that Microsoft announced what they would do in this space three years ago with Live Anywhere and have since done very little with it whilst the competition have streaked ahead.

So the mobile device train is leaving the station and Microsoft aren’t on it. But their fiercest competitors, Apple, Sony and Google are. What is even more surprising, Nintendo, who have dominated mobile platforms for years, are missing the very same train.