No, I am not the one "showing my ignorance" here.  Gaming has NEVER been a significant part of Microsoft's business.  EVER.  Show me on an earnings report, ANY YEAR, where gaming contributed significantly to their bottom line!  I don't care how old the studios are, or what games they have released (hint, none of them had as much impact as either of the two examples I already gave)...they aren't a GAMES COMPANY. 

No argument there. But MS isn't competing in a vacum. The have competition in the PS4 and its kicking their ass. And everything you said about their OS, has nothing to do with the fact that its still weaker hardware compared to their competition and said competition has the all important mindshare momentum going for it so far.

Simply put, what happens in 2/3yrs when MS miraculously turns things around with the XB1 but at that point the PS4 has 50M consoles sold to the XB1's 25M?

In the console biz, historically; there has never been a time when two consoles launched at the same time and whichever console took the lead ended up losing it before the gen ended. Right now its saf eto say that MS isn't rally competing with the PS4 anymore, they are competing with the wiiU.

And people will still ignore it.Nothing you said equates to a quality gaming machine.Just all hype,speculation and unrealistic expectations as usual.Same thing was said about Kinect.

Yet, MS has been in the business longer than even Sony. If, despite it not being a significant part of their revenue (I agree with you here), they still commit to games year after year, what does that tell you?

Yeah, I as referring to MS as a software company. Last time I checked, games are software to so.... :)

And yes, wikipedia isn´t the most reliable source, but that list gives you a hint that MS are dedicated to games, despite it not being a big part of their revenue.

hahaha Nice bump!

How do you describe significant.  MS have had a gaming division for a long time.  MS has poured billions into their gaming divisions over the course of their years as a publisher.  Just because gaming does not make up a significant dent in their global revenue does not mean they have not invested into it.  MS has invested into their gaming division more than most publishers.  Currently they have over 20 studios and have invested this year 1 billion on just the Xbox one.

http://www.joystiq.com/2013/05/29/microsoft-investing-1-billion-into-games-on-xbox-one/

Here is a list of games MS has published since the MS DOS days.  You might find that they were on the same level as most game publishers during those times as well.

http://en.wikipedia.org/wiki/List_of_video_games_published_by_Microsoft_Studios

What you are getting confused about is that since MS is such a large company gaming is not significant to their business which would be correct if not kind of one sided.  What you are missing is that MS spends more money than any publisher and probably even Console maker including Sony and Nintendo since the DOS days.  In other words their investment in games is on the same level as the industry.

Yes, the PS4 is winning but a war is not won by the first salvos.  There is a long march for both the X1 and PS4 and who knows how things would turn out in a few years. There is nothing guaranteeing that the PS4 will be 50M or even 25M in 2 years.  Gamers are fickle and it only takes a few stumbles to slow momentum. 

The other point is that MS nor Sony really need to be the market leader, instead they need to sell strong and make a profit.  Improving your product and increasing its reach while maintaining profit is more important than having a few million more product in the market.  In business success is not only defined by how many products you sell but instead how many products you sell at a profit and how much growth you can expand the business.  Do not confuse the fanboy number games that goes on in these forums to how a business operates.

As to the OS, you did not get what I was saying.  Forward thinking mean that they are not dependant on the current hardware.  This means if MS move to a different hardware infrastructure or decided they want to do a Playstation Now service, it will be eaiser for them to keep backward compatibility and deliver those services faster because the OS is run from a VM.  That VM could be deployed within the next iteration of the Xbox hardware or used within Azure to spin up X1 system for game streaming.

Who said anything about quality.  The current PS4 and X1 are already quality gaming machines.  

Case in point would be the PS3 and 360.  Neither of those consoles are even close to being the same as when they started.  Both MS and Sony has add a lot of value to those systems over the years that have made them much better products.  The competition between MS and Sony have edged them both and sharpened Sony the most this generation.  Both companies services have improved because of competition amoung each other and this have only helped the consumer.  Do people ignore the PS3 now compared to how it stated.?? Is the PS3 and even the 360 as value propositions much better than when they were released.  Are you really thinking this through or are you just knee jerking a reaction?

In the hardware aspect, Microsoft hasn't been very lucky. The first Xbox sold only a bit more than 30m units (machine saved by Halo). The 360 was plagued with the red ring of death, costing hundreds of millions in repairments and guarentees. Now the XBone, the thing was almost burned in a stake due to the Kineckt being apparently mandatory (and all of the polkicies behind it), not being as powerful as the PS4 and it's not selling half as good as Microsoft wishes.