(Business Perspective) Does MS really need Xbox Hardware?

[JWeinCom]

The question in the title asks do "we", presumably being gamers, need Microsoft. People respond with the benefits that Microsoft being in the industry has for gamers. Then they are told that Microsoft shouldn't care about any of those things.

You have conflated two questions.

1) Do gamers benefit from Microsoft being in the industry?
2) Should Microsoft, in its own best interest, stay in the gaming industry?

And when people answer the first one, you criticize them for not answering the second. Kind of unfair. And I don't think reading the OP would really help clarify that.

So, to answer them separately.

1) Yes. Competition, generally, is good for the industry. Microsoft funding Halo led to kind of an explosion in first person shooters, with GOW doing the same for third. Microsoft's XBox Live pushed Sony to better their online service, and Gamepass pushed Sony to offer a similar service which I think is a pretty good one.

2) That's really up to Microsoft. I think they see their presence in the console space as a means of getting more people into their services. For instance, get people playing on XBox Live, and even if they don't stick with consoles, they might keep on in that ecosystem. Or get them started on Gamepass and even if they don't continue on console, they will follow the service to where it goes next. For something like Gamepass, a large part of the potential market is on consoles, and I don't think that kind of product can be successful without a console presence, at least for now.

Whatever the case may be, it seems Microsoft thinks it's worth investing in. I would say that their internal teams have more data on this than you or me, so I would generally defer to them. They see a benefit here either because their current level of success is good enough to make profits in the console space, or because it leads to greater profits elsewhere.

So, that's an answer to the two separate questions you are actually asking.