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I always supposed ms was using the xbox as vehicle for windows as they almost did nothing for gamers before xbox(some flight sims,a little bit realtime strategy)and they've proven me right since kinect
but they were really important for competition since Sega left the hardware business as nintendo became lazy in the early 90ies and was missusing its monopol and sony became arrogant with the ps2 .
Without microsoft console internet standard would be now on Wii standard(sony)
and almost non-existing on nintendo systems(its still pretty shitty)
Nintendo owners who aren't interessted in internet don't care about this but most gamers do.

The thing ms should not have been allowed to do was buying rare-Rare was almost useless for MS but it hurted nintendo a lot as they have lost lots of home console core users since then and some interessting franchises.(i bet wii u sales would be twice as high with Rare on nintendos side)
On the other hand Nintendo did something similar with exclusiving monster hunter or dragon quest for handhelds though they already had 70%+ handheld market share.Greedy bastards trying to monopolize handheld market though they already were too big and too fat.Since than(and considering nintendos low tech hardwars) i think they get right now what they deserve.

I think nintendo is just now paying the price for ignoring competition hardware and internet-wise.this is not microsofts fault.