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<< [Actually, with MS, it is always about the money.
MS feared too many would surf the 'net, do email, etc. using TV set top devices.... >>
Why would that worry them? I mean, they already own WebTV. >>
WebTV was basically a failure--the market stalled out. Video games, however, are HUGE. It's a giant market that's constantly growing. And Sony has a gigantic chunk of it. Video game consoles are the easiest way to get into people's homes with Internet-like services. Microsoft is afraid that in the future more and more people will want everything (TV, Internet, phone, and basic computer functions) integrated. A good start for creating an integrated device is with something like a game console. Already, they're starting to do more things than they used to (play DVDs and connect to the Internet, for instance). If the market starts heading this way, Sony has the advantageous position. And Microsoft is uncomfortable with that (with good reason).
The Xbox is simply a hedge against this trend. If nothing ever comes from the integrated-box type device idea, no big deal. Microsoft is already dominating in other major areas. But if the market goes the way Gates is afraid it might, then he would be in trouble if he didn't have his own console. By putting out a kick-ass game console, he puts his foot in the door to this market. Even if Sony stays the leader, it's important that Microsoft have a big piece of this market for insurance purposes, if nothing else. The Internet revolution took Microsoft by surprise at first, and Gates has been paranoid ever since. The Xbox is simply another manifestation of this paranoia.