Microsoft's original plan was to own the living room the way they own the office space. Not just gaming, but all your movies, TV, shopping, etc. could be done through the XBox.
Kinect was a particularly big jump in that regard. There were demos of AR-type stuff where you could see yourself wearing clothes you might want to buy. You could move around and the clothes on screen would move with your body. There's some promo videos of that, but nothing concrete ever came of it.
Now they have slagging sales for two generations, and a AAA industry that struggles to make a real hit and is laying off a lot of people. They can't even hold onto the core gaming market much less get their tendrils into the rest of the living room. They then release a handheld that's basically an upgrade of an existing handheld that wasn't selling very well, but now with XBox branding.
Is this a problem for the rest of us? No, not really. There's plenty of alternatives, and we don't need to care. Is this the result the money people at Microsoft envisioned when they started this ~25 years ago? No, not at all.
Close. WWII America had to invest heavily in farms to feed soldiers who need 4,000 kcal diets to support marching around with heavy packs all day long in potentially cold weather. That investment drove up automation in the farm industry, particularly with corn and soybeans.
War ends, but the infrastructure is all still there. If farms weren't heavily subsidized, they would collapse. There was real risk of fields going fallow on a mass level, resulting in too little food to feed the population. And then you have to keep subsidizing it, forever. Nobody has figured out a way out of that logic while maintaining a mostly capitalist production system.