Well, that may be true for Microsoft and Nintendo.... but Sony are very much in trouble right now, with all their divisions losing money and being heavily in debt. I mean, I don't doubt that each of the CEOs sdo actually have hot tubs filled with cash, but Sony's hot tub is filled with other peoples' cash, and at some point they'll want it back.
As for saying making the 720 a kinect media center would be suicide, I mean that... well, no one would buy it, Microsoft would just lose money with it. Let's not go crazy here, they wouldn't even be close to dying no matter what, but it would really just be a money-sink.