Looks like i386-pc-xbbox-gcc can't be found in your environment path.
Either add R:\\openxdk\\bin to your path.
Or
Edit the makefile so that the lines that read:
CC = i386-pc-xbox-gcc
CPP = i386-pc-xbox-g++
CXBE = cxbe
now read:
CC = $(PREFIX)/bin/i386-pc-xbox-gcc
CPP = $(PREFIX)/bin/i386-pc-xbox-g++
CXBE = $(PREFIX)/bin/cxbe