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Blones said:
Microsoft needs to find their own blue ocean instead of trying to go the same route as Nintendo. There's no way they can out-Wii the Wii without alienating their fanbase, so it'd be best for them to try to find a different segment of the market to expand.

 If there is one thing MS lacks it is creativity. Your reasoning seems totally right to me and to many others for sure, problem is MS out-Appled Apple, Out-WPd WordPerfect and Out-Netscaped Netscape, so they think they have a formula there.  Of course they failed with many other tries to copy other market leaders (google, AOL, Yahoo, iPod) but they seem to think it is a question of perseverance, as it worked for Windows or Windows CE for instance. 

Prediction: MS will last for many decades, (with the cash in hand they could lose one billion a year for the next 40 years or so) but still it will never succeed with something trully innovative of their own.  It's just in their DNA. Since Bill gates steped down from the CEO position, they even lost what they were really good at, IMO that was marketing strategy.