Currently Online 
In my opinion Microsoft are in this business to become the dominant player. They've spent billions this gen to get a bigger slice of the pie, but they're still a long way off their eventual goals.
They've clawed their way into this industry the hard way and I think Microsofts hugely expensive venture may well be what's kept other players out or wary of entering the market. (Not to mention Sony's recent losses etc.) They're daunted by the prospect of having to spent billions and billions only to see a return years down the road.
Still, MS have probably acheived some of their short term goals as far as this gen is concerned and will be in a better standing for next gen.
As for the 'Playstation brand means almost nothing' comment, I completely disagree. The Playstation brand is undeniably huge. There are still parts of Europe and no doubt other countries where people don't even know what an Xbox is and prefer the Playstation off brand name alone. I don't think the PS3 could have even sold as well as it has without it's strong brand recognition.
Also Microsoft would not have 'feared' Sony.
