MS has done pretty damn well in gaming. They've been 2nd now in 2 straight generations, and their XBox Live Arcade (which has near 100% markup) is supposedly raking in millions each day. Everyone was expecting another 3DO, and instead they dethroned PlayStation.

Their performance might not seem as impressive as it is because they have other multi-billion dollar products, but the Xbox has been a gangbuster success for Microsoft.

Look at it this way. If you think Microsoft knew, when they started their foray into the video gaming world, that they'd be exactly where they are today that they still would have done it?

My guess it they're REALLY happy with the way it worked out.

Actually, they did get into DVD players, with the Japan-only Q: http://www.nintendoworldreport.com/reviewArt.cfm?artid=3886 and the Wii is supposedly going to add DVD capabilities (for a couple years now, though): http://www.nintendowiifanboy.com/2006/10/31/japan-getting-wi...

You can already add DVD capabilities through a tiny hack that works on modded and unmodded Wiis: http://www.engadget.com/2008/08/13/the-wii-finally-gets-dvd-...

My point is that they aren't likely to do a stand-alone DVD player ...