Originally Posted by whydidnt
Microsoft realized that gaming was moving from the PC to the living room and wisely decided to join the game. When consumers buy a Microsoft game console, at least Microsoft gets "something" out of the deal.
I have to agree with you here. The XBox is Microsoft's attempt to get into the living room. Even beyond gaming, there's entertainment and a wide range of other potential applications that the XBox can satisfy.
The same could eventually be said with Windows Phone 7 and the Zune. People used to play a lot of music on their computers (pre-iPod) and that has changed. Microsoft is trying to expand into other markets, not cannibalize existing ones.