You know what. I've been thinking about it, read most of this thread, and deliberating. At first, I was agreeing that Microsoft dropped the ball. Then, I realized, since I upgraded my PC (not a master-race-post-thing, wait for it) a few years ago, I've had a diminishing interest in Consoles, and no interest in ANY of the next Gen. Then it struck me that Microsoft is doing the right thing, and possibly smarter than PS4.
PC gamers are NOT the target demographic, we love our PCs. Console eveloution has changed since 5-10 years ago. There's no more major innovation anymore, just bigger graphics. In the end, all a Console can strive for is to be a higher end PC in your living room, and Steam is edging in on that with the Big Picture thing. There is no real demand there.
What there IS a demand for is exactly what Microsoft is offering. Multimedia. It's targeted at a family that uses their living room. I don't watch cable, barely watch movies, and any I watch are on Netflix (or other). But if I had cable, and my family used our living room as a TV center, and I needed a music center, etc. etc. then this would be perfect, it ties your whole living room together. Blu-ray player? nope, cable box? don't think so. Stereo, no.
Game consoles are for that living room dynamic now.
It occurs to me this may not be as earth-shattering a revelation to some, but I figured it needed to be said. Consoles are not for the dedicated gamer (not that a dedicated gamer couldn't get a lot out of them). There for the gamer who wants to play, and not worry about the hobby side of a PC, about the potential upgrades etc. And hell, I'm sure some people will still own both, but they're buying the console for other things I'm sure than just games.