As someone, including Kasz216, suggested, MS kept on whacking the beehive and now Sony could really be pissed off, and as Nintendo conquered the first place in the pure gaming market, they could really try harder to seize the living room with PS3, and MS simply isn't ready for this, neither with Windows, that is still too complicated for the task, nor with XBox 360, that's going quite well in games, but lost the non interactive entertainment train betting on the wrong HD optical drive format, while the vast majority of people won't have an internet connection fast enough for HD video still for a long time.
When Windows 7 come, even supposing it will be simple enough for the living room, HDTVs and BD will have already started taking off and PS3 will already be well established, so MS will be late to try getting a bit of this market it desired so much.
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