We've reported on Microsoft's development of a custom Xbox gaming handheld a number of times, with Microsoft Gaming head, Phil Spencer, recently confirming a foray into hardware was in the works. Now, though, it seems as though Microsoft has shelved the idea for the meantime, instead putting its wei...
My point here is that none of these cases feature Microsoft inventing a brand new product and trying to market it for the first time. Their whole strategy from the very beginning was to look for existing products with existing markets and try to conquer them. They even had a name for a variant of this strategy (targeted at open standards) which the US DoJ famously discovered during the antitrust trial:
Embrace, Extend, and Extinguish.