We're dealing with too many variables here. It's not always advertising, sometimes it satisfies a persons want, they watch the story, they never buy the game.

And even if it is advertising, so what, it's still their game which they made, they coded from the ground up, they own the ip, they made all of the art assets and they paid for a team of 40 composers to create original music.
The kind of work that goes into a game is nowhere near the kind of work that goes into a commentary video of gameplay. Hell, you can do it for absolutely free with shareFactory and a ps camera.

Every business has a level of job security, unfortunately for commentators there's is very low, because the video footage features content that they do not own. Microsoft make something, they want their money for it, and deserve it too.

Listening is the music experience. Watching is NOT the game experiece. You don't have to pay the car manufacturer either if you record a video while driving the car, I believe. And if you do, that's just retarded and against my sense of justice.

I never said it hurts their business. But it is their content.
It is also not always guaranteed to be an advertisement, sometimes, not always.

Just because it is a sale they were never gonna make - that money should go to someone who merely streamed their hard work?

Youtubers should create their own original content, then they deserve every penny to the bone they make.
Otherwise if they want to display someone elses hard-work, and all the other person is asking for is a fair split of the ad rev, it's a pretty reasonable deal on ms behalf.

I certainly got the game experience from watching beyond two souls and Telltales the walking dead.
Hundreds of thousands likely would too for story based games.

Even so, music belongs to music publisher x, so they deserve the money.
Game belongs to game publisher y, they deserve the money for their hard work

My edit was too late, it seems. But by your logic you're pretty damn close to saying people must pay car manufacturers if they record a video while driving.

If they make money off the fact the car is the attraction of the video, then damn hell the car manufacture would deserve the money. Naturally, the car manufacture probably wouldn't ask for it, but if they make money on ads, then they have the right to do so.

If the car features for a few seconds in a video that makes money, it's fair usage on the video makers end, so their's no right there.

Edit : And also you have to consider whether you paid for the car. A car costs 5 grand to make, you pay 10 grand, you own the car and the right to use it.
A game cost 20 million to make, you pay $40, you own the license.

Content -> music, tv, video, games is licensed

I now see where our problem is.

There are some games like the nes he mentioned, where watching it is the entire expirience, or most of it.

what is so funny? I've stated fact and it's relevant to this situation. They should be going out of their way to win people back not create more negativity. Many YouTubers will see this change and they will just avoid Halo. I deal with a lot of these YouTubers as part of my joband it's not gone down well. This guy may seem like he's over reacting but he used to be big in the Halo 3 community back in the day so trust me he understands exactly the damage this will do. He's pro MS more than he is Sony so you can't say he's got a chip on his shoulder. 

I've got the feeling you will reply saying you laugh because I've made a few negative MS threads lately. Which I have and I'm trying to think of a few SOny threads to make next to even things out. But in the meantime enjoy my game breaking GTA 5 glitch thread and soon to be created Far Cry 4 glitch thread which is in the works. Plenty of hate and love for everyone :) 

MS are getting free advertising for the lets plys and other videos such as funny/best moments or a plethora of other types of vids like in game easter eggs, funny glitches, secrets, tips and tricks. Or even people analysising a game trailer they release. 

Games like The Last of US became a cult hit due to guys like Pewdiepie and many others playing them. Sure you will get a lot of people who don't have a ps3 watching it and never buing it but it has a huge effect on people with the console and people who just need 1 big reason to buy it. And 99% of these people won't watch a walkthrough with nocommentary. They subscribe to pewdiepie because they like him and watch the episodes to see his reactions. 

I work in this industry and it's a well known fact many gaming companies pay huge money to youtubers to play their games. and it covers almost every genre under the sun.