If they become profitable on a steady enough way, they won't give up even if they don't get 1st place. Earning money and slow down competitors preventing them from getting living room dominance may not be the best case MS wishes, becoming itself the living room master, but it's still enough and quite satisfying. Although it's still quite risky for MS, not being unable to totally crush Sony's, and possibly Nintendo's too, even partial takeover of living room computing could lead to a partial erosion of Windows' share of home computing market. But this is even a stronger argument AGAINST abandoning consoles, whatever happens. And right now MS can only hope Nintendo hasn't the same ambitions Sony had for home computing market, but I suspect that whatever Nintendo is planning, it won't let MS know until it's too late.
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