Microsoft today announced its largest lay-offs in company history ever, with 18,000 people getting affected over the next one year. With these layoffs, it appears that Microsoft’s Xbox Entertainment Division, which was supposed to be creating original programming content for the Xbox One, as part of Microsoft’s unified TV and living room strategy, has also been shut down, putting a premature end to that venture.

Xbox Entertainment Studios were founded last February, with the intent of providing quality content for Microsoft’s Xbox line of consoles beyond just games. However, so far, nothing has come out of this venture, and it appears that nothing will.

However, the Halo live action television series that was announced for later this year, due to air on Showtime and on Xbox One consoles, is still on track, and will continue to receive Microsoft’s funding; it is possible that Microsoft views the TV series as part of a cross media promotion of the Halo brand, rather than being part of an overarching TV strategy.

[Gameinformer]

It’s not as if the actual console is being rubbished, so much as Microsoft’s direction for it. Instead of games, there was talk of having an all-in-one media solution – which is how the console gets its name – where you can play games and catch up on your movie and TV viewing at the same time.

The implementation and symbiosis of Kinect into the console’s ecosystem is now complete. It now tracks your controller, automatically loading up your saved games while responding to your voice commands. But the question still remains: Where were the games?

When Major Nelson announced that the conference would only be an hour long, I took it as a sign that Microsoft was going to focus more on what’s worked for it so far – that is, Kinect and the technology’s appeal to mainstream consumers. Aaron Greenberg’s statement later about the exclusives being shown at E3 pretty much clinched it. If nothing else, Microsoft had done a repeat of its now universally mocked E3 2010 conference wherein it devoted an entire extra day to showing off the Kinect. Of course, the next day wasn’t much better since Kinect appeared again but that’s a different story.

The point is: Microsoft no longer needs to focus on gaming. What does it have to do to appeal to its core audience? Why, release a new Halo and create some exclusive titles. Maybe get a new Forza game out. And if Remedy Entertainment can somehow impress people down the line with Quantum Break without delaying it for several years, then great.

But getting after the real money that’s in the Tivo and Smart TV market? Now that takes time. And it takes a lot to convince consumers that a device that was formerly best known for bro bashes and whiny Xbox Live players is their best bet for their living room needs.

The presence of appealing to gestures is a way to acclimate more users to the Windows 8 experience, if the appearance of the new Xbox Dashboard wasn’t enough. As such, the entire exercise is an attempt to appeal to the consumers making up smartphones and tablets, and who were responsible for Kinect being such a success in the first place. With everything that’s happening, Microsoft wants to get a leg up on Apple TV and Roku with its next generation console. If it can appeal the hardcore gamers along the way, then great.

It’s not like it takes much to satisfy us. Last I heard, the only positive thing about the conference is that there 15 exclusives planned, 8 of which are new IPs. Because if there’s anything that gets a “hardcore gamer” excited, it’s the words “exclusive” and “new IPs”.

I don’t blame Microsoft for heading in that direction. I do find that the Xbox One’s reveal felt incomplete with all this talk media and very little information about how certain things would work. So now I can’t pick up a game and play at a friend’s house without paying a fee? If my Kinect breaks, then what happens to my play experience? Can I carry on as usual? What if I don’t want to use Kinect at all? What if the gestures and Snap Mode and Instant Switching don’t appeal to me, and I just don’t use them?

Microsoft doesn’t have to focus on gaming anymore. It pretty much stopped along the way with PCs when it realized it couldn’t compete on the same level as real, hardcore developers. Somewhere along the way – with the Wii’s dominance and subsequent success of Kinect, doubtlessly – it realized it can’t really succeed on the consoles unless it offers consumers something they don’t already have for enjoying the things they can’t be entertained without.

And as much as we gamers will bitch and moan about it, the fact remains that it doesn’t take much to satisfy us. Alternately, it doesn’t take much to make us mad either (see how many people forgot about the “always online” rumours?). As long as we’re content to let Microsoft throw us a bone every now and then in the form of Halo or Gears of War or Forza, we’ll be fine.