Look at all the consoles. The 360 is in second place right now, and while it is selling faster than the Xbox, the third place console, the PS3 is selling faster than the Gamecube, and the first place console, the Wii, is selling better than the PS2.

If Richard, Fred, and Steve go fishing today and Richard catches 10 fish, Fred 4, and Steve, 3, and then tomorrow, Steve catches 17, Fred 7, and Steve 6, then Fred, while having sold more, is in the same position as he was the day before.

The same can be said for the consoles. Microsoft will sell more consoles this generation than they did last generation, but they will still have roughly the same market share give or take a few percentage points, and that's really not good, because in order for their business model to work, they will need a very substantial increase in market share, but as we can see, that's just not happening.

The only brand that's seen any real improvement this generation is Nintendo.

Just because the entire market is expanding doesn't mean that MS's success is negated. The fact that game consoles are more popular does not make people go out there to buy 360s. MS has put together a much, much better publicity campaign than there ever was with the xbox, there are many more good games, and it DID start this gen.

There are far more important things in console sales than marketshare % and their place in the console wars. Microsoft has been much more sucessful in expanding the popularity of their console this gen.

You see, the thing is, Microsoft never intended the Xbox to succeed.  It was a foothold console.  The real battle, the fierce campaigns of the war, began with the 360 and will continue with the successive console.

Exactly. Now they are seeing actual success with the 360. Not as good as the Wii, of course, but it doesn't need to be. It's doing really well already as it is.