Microsoft thriving in the industry was the result of a few events out of their own control.
1) Nintendo going even more kid-friendly (GCN, Wii)
2) Sony killing the greatest console market share of all time with a terrible launch (PS3)
The only thing Microsoft did was having throw away money.
The OG Xbox was not a worthwhile competitor to Sony, doing short of 25 mil (a commercial failure in the industry), and had it been any other company, the Xbox platform would be dead after that.
However, they had the money to throw at an early launch for a next gen console (4 short years).
Which was slightly underpowered, at that. If Sony hadn't made the PS3 confusing to develop for, and didn't royally screw up the launch, 360 would have failed, and after that they'd keep making failing consoles.
I mean look at the market share:
Gen 5
Sony - 103mil sold - 68%
Nintendo - 33mil sold - 22%
Sega - 9mil sold - 7%
3DO, Atari, Others - 3%
Gen 6
Sony - 155mil sold - 73%
Microsoft - 24mil sold - 12%
Nintendo - 22mil sold - 11%
Sega - 9mil sold - 4%
Gen 7
Nintendo - 101mil sold - 38%
Sony - 85mil sold - 32%
Microsoft - 84mil sold - 31%
Microsoft's solely captured market share from Nintendo, while Sony took even more market share in the Sixth Generation.
But Gen 7 Microsoft solely grew on stolen Sony market share. If Sony had retained most of it's market share (factoring in the success of the Wii too).
Gen 7 - alt
Sony - 170mil - 63%
Nintendo - 81mil - 30%
Microsoft - 19mil - 7%
Microsoft's success had only to do with money, and Sony screwing up, something that an Atari console doesn't have (mid gen cycle means no Sony/MS launch fails, no capital means no money)