Actually, they do. MS isn't (by far) the only 'essential' patent holder in the VC-1 patent-pool. However, depending on the resdistribution agreement between the patent holders (which we're unlikely to know to the full extent), I expect that MS is getting a reasonable (significant?) portion of the fees payable to MPEG LA in return.They don't have to pay for VC-1 or HDi licensing costs and clearly use the 360hardware for playback.