Exactly this is all about digital, and PC is miles ahead of consoles when it comes to digital sales so integrating the two makes sense. Also this way they can tackle Valve on two fronts, the Steam store(by pushing the Microsoft Store) and the Steam Box(wich Xbox One essentially will be and more). The only thing i wonder is could they get to the point that all games you buy in the Microsoft Store are cross buy? That would be a huge advantage over Sony.

It's not about sales. If you go back to the original Xbox, Microsoft never had an interest in being in the console business. The original Xbox was, according to the horses mouth, nothing more than a trojan horse into the living room. Microsoft was worried Sony was going to beat them to the punch in that regard and the Xbox was their solution. This is why you saw the slow and obvious "evolution" of the platform from core gaming machine (Xbox) to casual love fest (Kinect) to nothing but tv, tv and more tv (original Xbox One). Even within those leaked docs that came out a few years before the Xbox One launched, the bullet points were talking about their platform evolving into an "entertainment" device. Hell, their own brass started saying as much (remember the guy who said the 360 wasn't a console anymore, but an entertainment box?).

I think having Xbox One bomb so hard as far as achieving their main goal of being said entertainment device has thrown their plans into a top spin and they're struggling to make a shift now. I don't believe they're trying to figure out a way to remain a console gaming player. I think they're trying to figure out how to transition their core fanbase over to windows so they can get out because their business plan (entertainment hub of the living room) failed. 

Oh boy... you have an anti Xbox agenda and ignore anything MS does that doesn't support your argument.

Xbox never stopped being a core gaming machine and MS never stopped pushing core games. MS tried to appeal to casuals as well and they had some success with that.

Xbox and Playstation are both entertainment boxes. Millions of people use them for other forms of entertainment outside of video games. There would be less demand for them if they were just game consoles.

X1 didn't bomb. Vita and Wii U are only the bombs this gen. MS knows their biggest mistakes with X1. It was launching with Kinect and high price. The biggest mistake with PS3 was also high price. Next gen, they need to be more competitively price and keep pumping out notable games.

I don't have an anti Xbox agenda. I gamed on that platform from 2002 to this year. I just believe that they're not interested in competeing in the home console market anymore. I'm entitled to that opinion. You don't have to agree, but please try not to lobby assumptions about my motives and/or character. It doesn't do you any favors in a debate or exchange and only serves to derail your original argument, whatever that may be.

As far as Vita and Wii-U bombing, I don't have the data on Vita what Nintendo's gaming division made more money than Sony's gaming division last quarter so, no, it didn't bomb. 

They weren't absent last gen, Games for Windows was poor execution.

Frankly, it would be awesome if they brought some of those GFW titles to Steam and Windows Store without that DRM.

you really have no clue. both consoles are easily selling enough to benefit from mass production though mass production only reduces a certain percentage of the cost. Both have some very real fixed costs from their suppliers and shipping etc which likely aren't being reduced from mass production and both consoles sell at similiar prices. either they are both losing a lot on hardware or both are doing fine.

I'm making an assumption based on your words and the things you conveniently ignore. MS isn't in the console market solely for gaming but its crucial part of having a successful entertainment device. Therefore MS employees people who are passionate about gaming to handle that. The same thing goes for Sony by the way, Playstation is not just a gaming device and Sony uses the Playstation brand to push services that have nothing to do with gaming.

Its a safe bet Nintendo is relying on 3DS for profits these days. The Wii U is their biggest home console failure ever, which is most surprising given it followed their biggest console success ever.

You don't need data on Vita. Its lack of support and being virutally non existent at many retailers says it all.

Playstation 2 was the best selling console and was just a Console, with Just games.

a Console with just Games and good games, can out-sell a console with Multi-midia functions, because people only want to play games when purchase a Gaming console, and Online gaming is just a Gaming feature is not a Multimidia feature, People don't purchase Playstation, to hear Music, to see Movies, they just add those features to be more easy for people that already is playing, just do 2 clicks and use the Multimidia, that other wise would take a little while to acess the Multi-midia, if Someone want Multi-midia, so a PC, is what the person need, not a Home Console.

Billions and Billions of hours spend on gaming, much more than on the Features, the Features are nearly un-existent, in Time Usage, the features are just there for Practical use.

If someone make a Console, with very good games, good third party support, just with Games, and Online Gaming, the console can still dominate the market, just like PS1, and PS2, did.

would that work and change the market in favor to xbox?

Why would someone buy a new xbox too soon? the same visuals we have now in consoles, but in higher resolution (QHD?), and it would not be cheaper than ps4. People would still get ps4 instead xbox. old xbox one owners would be pissed because they wont be able to play the new games on their system.

I really cant see a new console from MS or Sony before 2020.

Launching an early X2 would cost MS billions of dollars and there'd be no guarantee they'd be able to recoup that. Might as well milk as much as they can out of the X1 that they've already invested billions into.