The Xbox is a great idea for MS.
Look at their top 2 profit makers (Windows and Office). They know that eventually the profits from these two ventures will begin to fall (with one goes the other).
It is MUCH better for a company to diversify WHILE they are making record breaking profits than once those profits dry up and the company is losing money. They just need to tread carefully as they grow that they do not get closed to the US governments definition of a Monopoly (talking MS as a whole, not the Xbox).









