All people have to do is look at the sales of content from Ubisofts last Quarterly Report. The PS4 was dominating the profit that Ubisoft was bring in. So, what Microsoft is doing is trying to get their sales numbers up. They will have less influence to make deals if they can produce sales for their partners. They are subsidizing sales.

Microsoft has more studios but cant its hard for them to develop on Sony's level. They tried to make their own new IP trying to copy Uncharted and it failed. MS is just terrible at new IP's. Very uninspired. As long as they have other peoples IP's they should be fine though.

Which game was that?? 

The prophet has spoken, Not of Playstation but of the Xbox One.   He's actually refering to the secret sauce hiding in the discounts.

They have recently been forming more studios and I am also curious of which game you talk of.

When the internet exploded because Microsoft paid to keep Tomb Raider from Sony and PC, Phil Spencer had to do damage control and admitted that they tried to make a game on par with Uncharted multiple times and failed, so this was their only option to make it seem like they had something to do battle with Uncharted next year. Apparently Halo 5 wasn't enough for them.

"Phil Spencer: Totally. I'm a big fan of Uncharted and I wish we had an action adventure game of that ilk. We've started some, and we've looked at them. But we don't have one today of that quality. This is an opportunity.

People push me as the content guy, shouldn't it all be about the content you're building? I want to own all of the hits on our platform. Well, not all of them - that's too much. But I want to have a stable of hits on our platform that we own. Absolutely. That's fundamental to us having a successful platform. When a unique opportunity comes up, I've got to go look at that. And this was a unique opportunity.

People have asked me before about IP we own, and they'll say, you own all the IP you publish. I'm explicit about it: that's a goal but there will be situations where we don't, and we've talked about those. Ryse is a situation where we don't own the IP."

http://www.eurogamer.net/articles/2014-08-18-xbox-boss-phil-spencer-makes-case-for-tomb-raider-exclusivity-deal

they are killing the xbox brand early next year, thats why they want all sales they can get.

Digital versions of games need to be cheaper, so this is a good thing not bad. Well done MS. Tired of paying 70$ for a digital game when I get no disc and case. Sure I save on not having to pay taxes but it's still BS.

Have a look at the WW numbers AND units sold compared to the PS4. That's why. MS doesn't play for second place. They play to win. What you're seeing is a company trying everything they can to change things around.

Seems like a smart business move to me. May not have been selling up to par on digital, so what do you do? Reduce price.