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Barkley said:
Snoopy said:

Software and subscription services are what matters the most. In fact, if these companies can sell less hardware, but more software/subscriptions the more money they will make.

And the more hardware you sell the more Software you'll sell. Which is why PS4 has sold twice as many games as the XBO, because it's sold twice as much hardware. Getting a cut of all that third party software is lucrative. Selling less hardware means selling less software and getting less money from third parties. MS don't get a cent when Assassins Creed sells on PC, they do when it sells on Xbox. So selling a lot of hardware guarantees a lot of revenue and people being locked into your closed system generating you revenue.

Not necessarily, it depends a lot on the region the console is sold and what the gamer's intent is. Selling a digital streaming service subscription could prove to be a lot more profitable than selling hardware.