Microsoft has realized this since before the original Xbox. The whole point of Xbox was so that Sony would not dominate the living room. Xbox used videogames as the starting point to get into people's homes, now comes everything else.
Same thing I said
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that's nothing that I haven't already said. MS used the games as a way to get into the living room because a Sony all in one box for the living room was a threat to Windows as consoles became more powerful & internet connected, the threat to PC is that people would see the consoles as good enough & all the extra stuff that PC's have wouldn't make much of a difference to them. & now they are going to use the same thing against the Consoles by giving people games that are good enough so the extra power that another console has won't matter to people who see the Next Box as good enough.
which is also what GoogleTV & AppleTV\Console can use to take over the living room especially GoogleTV because they can make there way into the living room through the TV & now cloud gaming can give people games that are good enough so that makes the TV the next big threat to MS so I'll expect them to make their way into the TVs like Google or start making their own TVs in the near future. "