Besides investing in games, teams, IP, etc, develop cutting edge new hardware so that the next Xbox is not merely a mid or upper mid-range PC, but truly something special. Custom silicon is exciting, and coupled with the ease-of-development, APIs, tools, etc which MS are good at, get developers to swing back to making Xbox the lead platform. It probably means investing a lot more in AMD, but that's okay, Microsoft has the money and perhaps it is in their best interest to help prop up and bolster Radeon Technology Group. Otherwise Nvidia will even further solidify their domination more permanently.