Microsoft did cozy up to the PC; it just happened to create a console that acted like a PC to hedge its bets and create a new product line.

The initial development of XBox came from Microsoft’s development of DirectX, which led to Microsoft doing a lot of the heavy development lifting required to make a console. At that point, all Microsoft needed was some hardware and it could ship product. So, Microsoft shipped XBox figuring that PC/XBox compatibility would beneficial for developers.

At that time, it was unclear if consoles or PC’s would win some forms of gaming. By making the XBox, a developer could develop for both, therefore defending PC gaming with Windows as an option.

Microsoft also made a lot of money off the consoles, since development costs were lower due to having to update DirectX for Windows as well.