Microsoft supported Windows Phone for a long time after it was clear that it would never take off.

Microsoft is really good at supporting products it releases even if they don't take off, at least when it comes to software.

Just got my last security update for my Windows Mobile phone two months ago. Years after they stopped making new phones and everyone considered the platform “dead”. Microsoft’s commitment to dead projects is pretty incredible, it’s probably the one huge strength they have. You know Microsoft will stick with their product regardless of its success.

backwards compatibility is Microsoft's motto

I think for Windows Mobile, their persistence and slowness made them fail. They kept trying to improve Windows CE based systems (not going to list all the renames) which were a very poor base to build on. When they finally decided to switch to a new OS/GUI they were slow and managed it badly. When it came out and they had good hardware as well they were way too late.

Nobody can say that Microsoft didn't pour everything into Windows Mobile.

But by the time they finally had a really good OS, developer interest simply wasn't there anymore and a mobile platform lives or dies by it's app store.

Gaming is different because you have the advantage of being able to court and fund exclusive titles eg Halo and Gears of War

The mobile platform is inherently different from desktop - what made the desktop OS flourish constrained their thinking when they went with Windows Mobile. Gaming, on the other hand... it's not like they weren't dealing with games on the desktop before Xbox. I remember reading somewhere that the Xbox is just a desktop PC in a different case, if you take a look at the components.

That's correct - the Xbox was about 95% COTS PC components. It had a Pentium 3, a Geforce 3 deriviative, 64MB DDR RAM, and a 8GB IDE HDD. Compare that to the PowerPC or MIPS processors and custom GPUs the competition was using at the time.