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I know they have dreams of taking a slice of the digital distribution of entertainment in the livingroom pie but sometimes I wish they would just focus on videogames for the the 360 and let other companies take care of the rest on the system (if it's worthwhile for those companies to do so). 

For example Microsoft has just made a deal with Safran Digital Group (read: paid out) to have exclusive original content created (shows) for Xbox Live Video Marketplace.  Now this money is likely coming from the money generated by licensing fees of games on the Xbox 360 so why can't they just put that money back into either internal game development, external game development, or buying exclusives for the system?  If they did that it would give gamers more reasons to buy the system and grow the installed base even more.  Then other media companies (tv, movies, etc) seeing the popularity of the system would come to Microsoft rather than Microsoft having to go after them.

Anyways it's just too bad that they don't have real gamers running things with the Xbox line rather than having so many business suits, some of which really are clueless about gaming.

(Note: I'm not saying everyone involved with the Xbox line is clueless about gaming, they have some people that are really passionate about it.  It's just that there seems to be a lot of higher ups there that aren't.)