It's a little disheartening to hear about Microsoft's failure in the gaming industry. The arrival of Microsoft on the gaming scene with the XBox and Xbox360 was a great boost in the competition of the gaming industry and has thus perpetuated increasing quality in game development and design.
This current fall of Microsoft is sure to dent it and may be a signal that it could be on its way to an early grave. I love the current new-gen consoles. The deeply integrated rivalry of Nintendo, Sony, and Microsoft has given rise to advances in experience design, hardware advances, and rich graphics, (somewhat respectively to each company).
The Wii is currently in the overall lead with its breakthrough in re-defining the video game experience. It's still sold out in most places, and has been since its release in November 2006. The XBox360 is the front runner for graphics with powerhouse games like Gears of War, Elder Scrolls IV: Oblivion, and Call of Duty 2. They're also releasing Halo 3 later this year which should give it a little more stable footing pending its approval by the critics. Sony on the other hand with the Playstation 3, is well... floundering with the competition. It has no spectacle game to garner appreciation from fans, and the hardware may be the best out of the existing gen consoles, but has yet to shine.
On a side note, I'm now tempted to buy a Sony PSP. Damn Squaresoft =/. They're re-releasing Final Fantasy Tactics, with FMV upgrades as well as new playable characters, AND new character classes. Damn them *shakes fist* On the other hand, I can break into it and try 'homebrew' applications which seem to be popular in the PSP crowd with installing emulators allowing the user to install old games like SNES and PSX roms. Hrmmm...
A random quote from a Chinese proverb. "One joy shatters a hundred griefs"