"Probably the best solution would be for the company to split up. The people who make the Xbox are probably weighed down by the rest of the company's ineptitude. I'd like to see those guys go their own way"
XBOX is running a version of Windows, which, is in many ways better than Linux. What's up for debate is its openness or lack thereof, but featureswise, Windows has lead Unix in a lot of ways.
Even Windows 3.1 had a better device independent rendering model than did the X terminals it competed against. And, ever since Windows NT, Windows has always had better APIs for threading while all many Unix's had (except for Solaris), was fork. DirectX is generally better than OpenGL. COM has its faults but in the long run proved to be the only binary object model that ever got used, and even the Windows desktop and shell has vastly better basic things like file dialogs than does Linux.
Visual Studio is still arguably the best IDE around and has been ever since Microsoft bought the Delphi guy over to write C#, and speaking of which, C# is a way better language than Java. Microsoft Office is still better than Open Office.
It's not that Microsoft has really sucked at the desktop, ever. They've just won so completely at it that they don't know how to do anything else right, although, I do think my Windows 8.1 phone is better than my iPhone 5s in some ways.