A lot of people haven't figured out yet that you can hook a computer up to a TV, and get better video and audio than you would get out of most DVD players and cable STBs. When those people want to watch movies, they put a DVD in, or choose something from Cable On Demand. I say this because most of the people who see the setup we have at our house get confused when the HTPC does something computer-ish, like show a boot screen. "Wait. Is that a computer? How did you do that? Does that cost a lot? How does that work? Where's the cable box?"
Microsoft isn't marketing Media Center, isn't throwing R&D at it, and basically left it out in the cold in Win 8. Rather than integrating the tuning, EPG, TV scheduling and recording, browsing and other useful features into Modern UI (fka Metro), they didn't even update WMC to make it a Win8 tile. It's a shame really, because they truly missed a golden opportunity to integrate WMC features seamlessly into the Metro interface and eliminate the need for a separate application for browsing.
Instead, I suspect that WMC's days are numbered. The development team has probably been told that they have to be a profit-center, which means that supporting just a single person with an annualized cost of $200k (incl. taxes, benefits, office space, etc.) requires selling 10,000 licenses at a $20 gross profit on COGS each year. I suspect that the team size for WMC is probably closer to something like 50-100 people including QA, EPG content managers, online content managers, device testers, multi-language documenters, etc. So the break-even point climbs up to 500,000 WMC pack licenses each year. If an installation lifespan is 5 years, that means there needs to be 2.5M active HTPC users.
Are there that many?