You may believe that, but most people don't agree with you, hence the sales of the xbox that people have been voluntarily buying for 7 years.  People don't seem to get that the sales are a measure of the entire market, and you are 1 person in that 260 million consoles sold.  Everyone has their preference, and people's preferences are overall better met when there is more people competing to meet your wants and needs.  Tricking someone into buying something isn't going to get you very far before it backfires.  The 360 has more than earned it's place 7 years from launch still selling massive amounts of consoles.  People have been saying for years that the wii is bad for gamers etc, but that's just the selfish opinion of 1 person, the sales are proof that is not the case.

I dont' care what reason Microsoft had to join the console race, every company is in it for the money.  Everyone corporation on earth is in business for selfish reasons, but in order to be successful they have to provide a good or service that customers voluntarily buy.  If they win the console war it is because that is what most consumer wanted, it doesn't matter the reason why they did it. 

wow, that's quite an outcome this thread has :)
at least the op has stated his opinion which is arguable but ok. to me it's clear that gaming would be different now without ms. the moaning about ms pretends cod is exclusive to x360 is legit but i don't here someone moaning sony pretending fifa 13 is exclusive to ps3 as they did.
another thing is the funny part regarding sony and nintendo would suffice - by the time back then the market was stuffed with sega and nintendo, there was no need for sony but they wanted to rule the market and they did. so why is this not possible for ms? because of their intentions? ridiculous. and of course, a market consisting of only nintendo and sony is not a real market as they are targeting different groups which means that sony dominates core-gamers and nintendo casuals. this is *not* called competition.

I don't know Nintendo likes to have hardcore too if they can.  SNES, N64, and even Gamecube to an extent tried for hardcore.

Xbox might not have been successful but i guess we will never know. Microsoft can compete with price take huge losses while Sony cant. Sony would have gone broke and Microsoft would have completed what they originally set out to do when they decided to enter the gaming industry.

How powerful would ps3 have been if it released nov 2006 in $299 and $399 skus and losing about $100-150 on each unit sold and had no blu ray? Something like right in the middle of wii and 360?

In a timeline I've worked on, I figured that a console at that price at that time would have been about as powerful as the Vita, give or take. The question is, what great PS3 exclusive could and couldn't work on the VIta?

I honestly didn't think it would've made much difference. Whatever extra power came from the Cell was never tapped into in a way that made the PS3's hardware advantage consistently unambigious. And the most hype and excitement was for the Wii, which had broader appeal and still would've been much cheaper. Even if the PS3 managed to get ahead, I don't know if it would've been able to match the Wii.

A more interesting question to me would be like this:

Say Sony still released the PS3 at the same price, but abandoned the Cell and Blu-ray support in exchange for a system with similar hardware to the 360--but more raw CPU/GPU power and memory. What could've they have done with the system in that context? How much more powerful would it have been? If PS3 games looked and ran significantly better, how would it have affected sales?

interesting.  So I'm guessing in this scenario Sony is still taking a $200 loss on every system?  If so they could easily put a gb of RAM in it and get better multiplats along with get their exclusives out earlier since the devs wouldn't have to master the cell.  GT5 could've come out a year or 2 earlier so that would be huge.  I shutter to think what ND could've done with an easy system with more power after seeing Last of Us.

Both consoles would be pretty weak and wouldn't last more than 5 years, so they'd need to release new consoles in 2009-2010.

Next gen will be longer than this current gen, so new consoles must be powerful enough to last. Forget about cheap consoles.

Well we've already seen that Vita can handle Uncharted, Resistance, CoD and Assassins Creed, some of those games weren't recieved well but thats not because of the hardware. Games like GoW 3, Uncharted, Last of Us wouldn't look as good but I dont see any reason why they wouldn't still be released.