The X-box would try to nudge the market in that direction. The box itself and the games it runs would be built and sold by outside manufacturers. Microsoft would merely design the operating system, then sit back and collect royalties. Microsoft is essentially trying to clone the PC market in a digital petri dish. This is possible because consoles are created for a single purpose by a single company that both makes its own games and makes sure third-party software works properly.
Programs never conflict with each other because no two programs are ever running at the same time.
While this arrangement has produced a world of benefits for consumers, it also creates complications that consoles were specifically designed to avoid. It's like trying to get little kids to upgrade to cell phones when their walkie- talkies are working just fine. Microsoft seems to be seeking another angle on convergence, the notion that computers will eventually merge with television sets into a single information appliance. But it already owns WebTV, a more likely platform for that sort of development. The company would be better off focusing on making PCs easier to use so its existing customers won't be tempted to stray to less complicated but less capable devices.