What Microsoft should do to stay competitive.

[trunkswd]

Qwark said:

As we clearly state Microsoft and not Xbox, is there anything wrong with being a massive and most likely profitable third party publisher. Perhaps selling 40 to 60 million Xbox units is enough.

Playstation gamers aren't going to switch to Xbox, unless Microsoft wants to bleed a lot of money and make COD exclusive somewhere in the second halve of the next gen.
On PC gamers aren't going to move away from Steam. Now obviously MS could buy Valve and keep Steam the way it is and all royalties would go to MS. Effectively making them the biggest entity in non mobile gaming. However we don't know if such a buyout could even pass.

A long shot is to buy EA or R2, when you own COD and EA it's sport games or the evergreens from Rockstar, by default MS basically can set the course of the industry. Though not much would change for Xbox.

Considering how much trouble it was for Microsoft to acquire Activision Blizzard there is no way them acquiring Valve would be approved by regulators as Steam is practically a monopoly on PC.