If it isn't the year of desktop linux yet, it's definitly the year of pocket linux, I mean look at the market share of google android. It's linux powering smart phones in most pockets

But it's not always about direct sales or revenues as well. It's also about the network effect that the xbox can have on customers. Someone satisfied by the xbox is a bit more likely to trust windows phones. It's also about creating an ecosystem with devices and services being integrated. With the install base of the xbox, they can easily upgrade them in iptv set top boxes, and gain more mindshare as a company

The same is true for operationg systems, where nobody can force you to buy Apple or linux or windows.

I knew from the begining that this was the reason MS got into game consoles. They probably told themselves that they should hedge their bets in case another device than the PC gets more popular in homes. Their rational might have been: We stay aside, and sony and/or nitento might win this a make a ton of money; the pc being a mature market with limited growth, or consoles geting so powerful that they can just accomplish well enough most domestic computing tasks... Or, we can get involved. Best case scenario: we will make some money, or at least break even. we will leverage our expertise in game and framework designing to port and creat new games for the xbox... worst case, we slow down sony by vigourously competing with them. Nitendo being less and less relevent each day (mind you this is before the wii) We cannot afford to leave this market to sony only. If all we do is lose money on the project, it'll be considered as insurance for protecting our cash cow windows from an emerging competitor: sony..