Microsoft wants you to have one thing in your living room. Sony and Nintendo are doubling down on gaming. Microsoft wants the whole pie -- which is why you hear them use the word 'entertainment' more than 'gaming', which is why we waited twenty five minutes to see a game demo.
If my anecdotal evidence is worth anything, they're going to succeed. Living in a house with three other college students, we spent just as much time on the dedicated YouTube and Netflix apps as we did on FIFA and Skyrim.
(A goofier interpretation is they're hoping people eventually call it 'the One' just like people call its predecessor 'the 360.')