MS feared that most multimedia things usually PC-related moved to the living room and SOny would control them from one point on ...specially as Sony didnt want to use their propietary software and keep their "I create crap software and then sit and receive billions year after year " virtuous cycle working ....
The 360 has managed more or less MS ambitions regarding this .
Sony isnt in the same position as before ,and they have definitely put a foot in the living room multimedia thing with the 360 and its netflix association .
But they still have lost some wars .For example the HD-DVD vs Blu Ray war ,that had the HDI interactive software of MS in the HD-DVD and was beaten by the Java-enabled Blu Ray.The PS3 still has better multimedia capabilities and has its Play TV peripheral ,and being the PSN free there are nearly more PSN users that Live users righ now...and the video dowloads for the PSN will also take some marketshare .Also the PS3 uses Linux ,its own web browser aside of Explorer ..
MS had 100% of royalties over most things multimedia with the PC ,but on the move to living room they are losing a lot of marketshare ,at least half the marketshare in their copyrighted software .
MS move prevented Sony from taking over from a substantial part of their business ,but they still dont have it for granted .BR has triumphed ,Linux adoption is growing ,Firefox adoption is growing ,Mac pressence is growing ,Vista is failing ,and the PS3 is still a succesful console despite MS best efforts .
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