Of 'the' living room? I don't think that's the case. I'd wager there are more wii's in living rooms than xboxes.
The xbox is first and foremost a teenage hardcore gamer boys game system, not a family games console.
Also, working off all losses 'in a few years' is great, if things stay the same for those next 5-10 years. But these things can change over night. Some new device on the scene.
Being back to square one in 5-10 years isn't a resounding success though, considering the massive profits Nintendo is making.
Nintendo has been successful, especially in terms of sales and profits, no doubt. And yes, there are more Wiis in living rooms and 360s and PS3s combined.
However, success is not only measured in short term profits. When Netflix was support was added to the Xbox Dashboard software a few weeks ago, it became the number one delivery vehicle for instant watch videos overnight. To scoff at that level of influence over the entertainment space is shortsighted.
Additionally, the sales trends of every console in recorded gaming history shows 80% of the console sales occurred when the price was below $200. The 360 just recently dipped into that range this holiday season.
My Xbox 360 just stole 90% of my media watching from my laptop, with thanks to TVersity. I watch literally almost everything through my Xbox 360 now. It's even beat out my plans to get a Mac Mini to do the job, and even better it's capable of pushing at 720p for the same price.
Before I got the 360 I was struggling with DVD's and usually resorting to watching video off my media laptop. I'm hoping Hulu starts allowing their content in Canada so I can stream shows from the internet through TVersity.
I have a Wii, but I've found the 360 winning a lot more play time over the Wii mainly because of the mature games on the console and the fact it works as a DVD player and media center just kicks the Wii when it's down.
I bought a 360 elite, I see that the Arcade version isn't as bad of a deal as I originally thought it would be. Although I think they should have gone with a 12gb SSD over a memory card, but that's from someone who filled up 20 gigs of my Xbox's HDD in about a week when I first got the console.
IMO I'd say the Xbox isn't the best selling console out there, but for gamers it's got the best content (having stolen a lot of exclusives from the PS3 like Final Fantasy); it's also a great media center (amazing when you download TVersity), both of which mean it's going to stay as close to the TV as your VCR used to (at least I know it will in my house).
Also, working off all losses 'in a few years' is great, if things stay the same for those next 5-10 years. But these things can change over night. Some new device on the scene.
Being back to square one in 5-10 years isn't a resounding success though, considering the massive profits Nintendo is making.