MS will probably change some of their policies... they'll have to if they don't want this to completely fail.
It is good to have competition though. It prevents Microsoft from doing whatever the heck they want like with Windows 8 and Office 2013. Now they'll basically have to adapt or die.
However, not that I think this will be the case, but if they reduce the price of their games to the same as PC, 2nd hand sales won't really be such a big issue.
