Is Microsoft's X-Box strategy still working?

Apparently, Microsoft has set its eyes on Nintendo. Gates stated at a meeting in the US that "he would immediately make an offer if Nintendo is ready to sell itself. If Hiroshi Yamauchi, the biggest shareholder of Nintendo and its adviser calls, "he will directly transferred to me", Gates said - let's hope they do understand each other, as we are not aware that Gates speaks Japanese, and that is is rather likely that Hiroshi-san would speak English.

However, what are the implications of the deal? Does it mean that Microsoft is trying to change its strategy to overtake Playstation 2 of Sony, for the lack of software and demand for the product, and sees the solution in shifting the battle ground to another arena? Are the software developers better at Nintendo than they are at the X-Box center - although both cannot be directly compared? It surely is an interesting thought that Bill Gates has thrown into the air.