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I think exactly like Lord N and Onimusha12.
That's the usual MS that I always known.
Even if MS want to target Nintendo next generation, which supposes that Sony is no threat anymore (leaved the console market?), I'm pretty sure they can't.
People keep saying it left and right: western devs can't adapt to less powerful hardware, they need the most powerful to make their games. Thus, they're bound to fail no matter what on a handheld or on an easy to use console. Their level of sophistication is too high for the audience of Nintendo they want to target.
As long as they're unable to understand, like lots of "hardcore gamers", that Nintendo's online is better than theirs, and continue to believe they have the best, they have absolutely no chance of keeping a target on Nintendo.
To target your ennemy, you need to understand their moves first.
They're VERY FAR from this point.