At this point, I don't think Microsoft have too much to worry about in terms of losing market share to a new entrant. Microsoft are currently losing market share to Sony, so their focus should be in staying competitive enough to prevent Sony from 'running away' with it.
The company that will be displaced and eliminated from the console space will be the company with the weakest amount of developer, retail and user support. Currently, that company is Nintendo. If you remember what happened to the Dreamcast, then you'll know why 2014 is a do-or-die year for Nintendo's console business. In the same way Microsoft replaced Sega as the third console provider, we might see another company replace Nintendo as the third console provider.
It's unfortunate, but it's the reality of competition.
I don't think you can compare the sixth generation's loss of Sega and entrance of MS with the current trend of consoles beyond Sony, MS, and Nintendo. This feels more like the fifth generation in that you have the established Nintendo, Sega, and Atari, but also a slew of new consoles like the 3DO, CD-i, Apple Pippin, Amiga CD32, Pioneer LaserActive, the FM Towns Marty, and the eventual victor, the Sony PlayStation. This time we are seeing extra competition in the console market due to Ouya, MadCatz, Valve, Amazon, Google, and Apple. Most won't succeed, but I can't see Valve and Amazon dropping out, nor Apple and Google dropping out once they get into the business.