Anyone who uses a XBOX for gaming is that much more likely to simply not use windows at all ... you certainly don't have to stick to windows to use Office.
Tablets more than powerful enough to run Windows by the way.
No, the XBOX merely caused Microsoft to never try to attack the causes ... and in the process attempting to saw out one of the legs holding up their core product.
Usability, stability, piracy ... Microsoft has always been the one in the best position to fix them all, they just lacked the impetus. Thanks to the XBOX.
You've made a lot of assertions about cause an affect and a lot of assumptions about how much control Microsoft has over consumer behavior simply by merit of having money without any actual data to support it other than, "in the growing PC market, MS's slice is a bit smaller than it was before, even though the total size of the pie is much bigger."
The bleed of PC usage into other device form factors and Microsoft's sluggishness to respond to that threat is completely independent from the XBox. As a company, MS is not sacrificing resources in Windows development to make the XBox (you can make some arguments about the fact that there isn't an unlimited supply of qualified developers, but MS is a *huge* company, and if you're going to make that argument, singling out XBox doesn't make a lot of sense anymore). MS was slow to invest seriously either mobile or tablet after Apple proved it could be done, but that's a strategy failure, not a tactics problem.
The reason that consoles are more popular than PC's for gaming these days is about more than just piracy. It's easier for developers to code for fixed targets, it's easier for consumers to deal with (no mucking about with drivers, etc) and so on.
Could Microsoft do something about some of these problems in Windows? Perhaps, but where's the benefit? MS doesn't get a substantial cut when someone releases a piece of software for a Windows PC. And if someone buys the game on console instead of Windows, it's still a sale of a piece of software on a Microsoft platform, so where's the harm?
In fact, in many cases it's *better* for MS because their core demo of office workers are probably going to have a copy of Windows for the PC in the home as well as an XBox. Now you got two sales where if all you did was slap live on PC you'd have had 1.
There simply isn't any data to support the conclusion that XBox has damaged Windows... and there can't be because it's not a measurable divide.