meh...
10 years ago, everyone laughed at this insane and crazy idea that Microsoft is entering the game console business. Talk about late! Going up against Sony & Nintendo! holy crap! Are they nuts? How in the world do they ever think they can compete against them?
1st year? flop. 2nd year? flop. 3rd, 4th, 5th? meh... not bad but still not a competitor really. Xbox 360 comes out and now look at Xbox.
It's extremely short sighted to think that ONE year after a brand new product is released in a highly competitive market to call it a failure. If Android was the one that came up today and iPhone & WP7 were the top two, Android would be in the exact same spot as WP7 (if not worse).
Microsoft is known for one thing: Persistance. The company will keep going after this segment until they reach the goal they are satisified with. Happened before and will probably happen again. They have everything they need at their disposal (technology, people, money, partners) to make it happen. The last ingredient is "time". 2012 should be great.