It's their answer to PS Home from what I can tell. All it seems to be is a customizable arcade with cabinets that you put in classic arcade games of your choice. http://www.gametrailers.com/video/ces-10-xbox-360/60521 Looks cool if the price is right
Well Home is totally useless so I don't see why MS would even want to copy that unless they just have money to throw away. MS is better at running online stuff but I don't know one Home is enough already.
if they want people to pay for it, it's got to be fun, engaging, and have things to do... Essentially the opposite of Home.
Exactly and I give MS a better chance of doing that than Sony but still I'm not sure if it's worth the investment for MS for the rewards they could get back.