I'll be honest: I think Microsoft started XBox because a bunch of managers really like playing computer games and thought it would be a wheeze. I fail to see how it uses their desktop monopoly or helps reverse integrate Windows into the server (which is what Hailstorm, .NET, Palladium, and XP do). People talk vaguely about "taking over the living room" but I don't see any economic drivers behind that at all. And I don't think XBox Live (ie. connected to the internet) will correct this.