Microsoft is eating their lunch in the living room anyways.
No one will want to play craptastic iPhone games on a large screen and Microsoft is already killing them in the app space with stuff like Crackle and HBO GO. Sure the paywalls suck, but that can change over time. Microsoft was willing to deal with the cable devils in order to get a foothold. -- "WHEN THE LAUGH TRACK STARTS THEN THE FUN STARTS!"
No one will want to play craptastic iPhone games on a large screen and Microsoft is already killing them in the app space with stuff like Crackle and HBO GO. Sure the paywalls suck, but that can change over time. Microsoft was willing to deal with the cable devils in order to get a foothold.