I don't think Microsoft ever got to control the living room. Even today I think the house is controlled by Google and Amazon with Nest and Alexa.
Microsoft clearly wanted to become a media center with WebTV, and XBox later, the problem is that it never really went into home automation devices or real affordable computers like the dot which doesn't even require an expensive screen.
I think the xbox and pocket PC investments in the 90s and MSNBC they could have made some trifecta for news, games and devices control. Like smart lights, smart appliances and smart tv.
I remember commercials even for thin clients PC on the kitchen and around the house.