Is it though? Almost everyone I know used their 360 as a Netflix machine in addition to games, maybe even more often than for games. MS was on track with owning the living room, at least in NA, making money from Gold subscriptions, games, ads and everything else in the ecosystem. But they blew it pushing this idea past well its breaking point (HDMI in, Input One, TV TV TV, NFL NFL NFL, the next water cooler) and created a console almost no one wanted.
Yeah, the "living room doesn't matter" myth doesn't make sense, Netflix disclosed that the PS3 was the most used device for Netflix, even higher than PC & iOS.