A service like GP and huge game releases with massive sales can't coexist on one platform, or even within one ecosystem. They'll need to choose, and seeing how little they care about the Xbox hardware as a concept, I think full-on software giant is their likely future. Microsoft centrally has been opposed to the Xbox division for ages, citing its continued hemorrhaging of money on the hardware side of things. And their strategic purchases before the recent spree of major studio purchases, would suggest a company very much gearing up towards gaining a foothold on several platforms and in more markets.
Microsoft have always been one of the biggest software companies in the world; but never a hardware contender of significance. Sony, Nintendo, Apple, a slew of phone manufacturers, as well as other players, all have a solid foundation as hardware manufacturers (some across several markets and spaces at that).
From where I'm sitting, it makes no sense for Microsoft to continue releasing static machines that lose them money, and fail to gain entry to some of the biggest markets on earth. Focusing all their effort on software, and potentially multiplying their user-base several times over, would be the smart choice; not to mention the cheaper/more profitable one.
There's no way they didn't realize what GP would do to their own market and software lineup, and there's also no way they never had a contingency when these effects came into play.
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