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MS said themselves they were in this market because they felt endangered by Sony grabbing the online gaming market with the next iteration of the Playstation (yes ,the PS3 ) wich was a market they tought should be theirs as there was a ton o money to make .Just thinking having 100 million people paying the Live fees must have sent thrives trought their corporate spines .

They will spend as much money as they thing neccesary to "buy " this industry .

Problem is that Sony and Nintendo arent exactly something light to take on .Nintendo with its current price-friendly ,casual and marketing centered strategy is putting themselves way ahead .And Sony may not be doing great but it is still outselling the 360 both in Europe and Japan and threatening to do the same in the US after the price drop .Even if they are even in the US any push in sales for the japanese and european market will accelerate Sony overtaking Microsoft again .In Christimas they may well sell very good both in the US ,but the PS3 will put one million of difference in Europe and mayve even more in Japan .

This time ,the X360 in the long term will be a clear third .