I don't think the 360 is a failure in the sense that MS would throw in the towel -- it failed in other areas such as hardware reliability and, in my opinion, losing the value proposition to Sony. Why spend $300 for the Xbox 360 (hard drive model) when the same $300 gets you a PS3 with a blu-ray player and you don't have to pay extra for playing online or using Netflix? A lot of us saw this coming a year or two ago and IMO, Sony really upped the ante in terms of value. It is absolutely, positively ridiculous that I have to pay $40 to $60 a year to play games online or use Netflix on the Xbox. MS can charge what they want, but I let my 2 XBL subscriptions expire and will never renew them. If I decide to get a console from the next generation (a big IF), MS will have to do much, much more to win me back as a customer due to the hardware debacle and the cost of XBL.