Why would Microsoft abandon their console after they have started to make a profit? They are doing amazingly well for being in their second generation and competing against two juggernauts of gaming.
Do you realize how much money there is in the gaming industry? It's one of the most rapidly expanding markets in the world with billions upon billions of dollars in revenue.
If you think Microsoft is going to give up on such a wealthy market after already having made advances in the industry far beyond what anyone expected then your not very familiar with the history of Microsoft.
edit: although i do agree with your analysis of Nintendo and more or less on your views for Sony. However I disagree with your reason for Microsoft entering the market. Looking at past statements from Microsoft its obvious that they were trying to find a way into peoples living rooms and a console is an obvious extension of such an idea.
The definitive evidence that video games turn people into mass murderers
