"The $1 billion Microsoft plans to invest in exclusive games will get Xbox One users 15 exclusive titles in the first year the console is available including a few completely new franchises."
http://www.dailytech.com/Microsoft+Spends+1+Billion+on+Exclusive+Xbox+One+Games/article31656.htm
The argument that consoles don't need exclusives is completely flawed. While some gamers will buy 3rd party titles like FIFA, Madden and COD, there are millions of gamers who buy consoles primarily for exclusives. There are also millions who buy consoles for both 1st and 3rd party titles.
The key question isn't if exclusives are needed to sell consoles, but if paying millions and billions of dollars to secure exclusives or timed exclusives is worth it. Clearly, in some cases like Rise of the Tomb Raider on XB1, it wasn't worth it. Sometimes the millions of exclusive sales aren't enough for the developer/publisher to forego selling the same game on 2-4 other platforms. The goal of the developers/publishers is to sell to as many customers as possible. Sony/MS/Nintendo either have to create their own 1st party games, pay huge premiums to secure exclusives or buy up studios and force them to make exclusives.
The reason PC gamers do not care as much about Xbox is because almost all key Xbox exclusives run and look better on the PC.
Record number of gamers are ditching consoles and building PCs. PC gaming hardware sales are at all-time high and continue to grow.
"Comprised of pre and DIY built gaming computers, upgrades, and accessories such as input devices and audio/communication systems, the market exceeded $30 billion in 2016 and is forecast to grow at a 6% CAGR (compound annual growth rate) through 2019."
https://www.techpowerup.com/229785/pc-gaming-hardware-market-mints-billions-exceeds-usd-30-billion-jpr
The key strategic reasons for the existence of PS4 Pro and XB Scorpio are the retention of existing console gamers in the Sony/MS console eco-system and desire to lure in gamers who are on the edge, choosing between a new console and a new gaming PC.
MS/Sony/Nintendo are all fighting for market share in a shrinking console gaming market. The only reason PS4+XB1 consoles vs. PS360 look good is because the Wii is removed from the equation. If we add the total user base of PS360+Wii console gamers, the console gaming community has shrunk.
MS/Sony will do whatever it takes to grow their user base and having exclusives is a way to make sure the console stands out compared to the competition and PC gaming. It's the reason many PC gamers have Nintendo and Sony consoles but not Xbox.
Exclusives do not guarantee that a console will be successful, but lack of exclusives virtually guarantees that a console will not be respected historically in the console gaming community once its life-cycle is completed.
Long-term, MS probably wants to turn Xbox into a gaming and media eco-system. This is why they are allowing Cross-Buy/Cross-Play. Any incremental revenue from software represents potential profits to MS. Therefore, for Sony/Nintendo, as long as exclusives exist, it must be true that on average they are profitable, even if some like Rise of the Tomb Raider (Xbox) exclusives can be failures. For MS, since their install base is small, they probably see more benefit tapping into PC gamers. If Xbox One had 40-50M users, MS may have chosen to keep more of their exclusives on the Xbox One.
Another comment that games automatically scale on consoles is absolutely false. The only major AAA developer admitted to scaling games is EA. CDPR is possibly another one.
"Blake Jorgensen says EA studios develop for the most powerful systems, and then scale back for consoles."
http://www.pcgamer.com/ea-says-all-its-games-are-developed-for-high-end-pcs-first/
Nearly everyone else, and almost 100% of Japanese developers, make console specific versions and either later port them to the PC or have a separate team working in parallel on a PC version of a console AAA game. It's why most AAA 3rd party games start off as console games first and are ported to the PC. Since current game design uses higher art assets that are scaled by programmers to fit the performance of the hardware, the reason PC games have superior textures for almost all AAA games is because these art assets were already created for the console game.
What MS wants is for developers to target XB Scorpio and scale the same games down to XB1. This process does not automatically occur in-game engine. Unless game studios specifically target PS4 Pro/XB Scorpio consoles and create exclusives for those consoles, the full capability of those consoles will never be realized. It's why PS4 Pro and Scorpio are "stop-gap" consoles this generation. MS likely wants to change this by ensuring that XB2 games run on Scorpio and Scorpio games run on Xbox 2. Microsoft's goal is to blur the console generations and turn Xbox into a platform. The reason MS is also making XB exclusives playable on the PC is because PC gaming is a bigger long-term threat to Xbox than PlayStation is. The more consoles get more expensive with overpriced accessories, underpowered off-the shelf PC specs, uncompetitive cost of games vs. the PC eco-system, the less consoles make sense and the harder it is to grow the console userbase long-term. Microsoft just sees this threat much clearer than Sony does.
We don't have a clear idea as to what Sony will do with PS5, but I'd bet 90% chance that PS4 & PS4 Pro games will work on PS5.
It's simply too costly for game development now to have 4-5 year console generations. It also doesn't make sense to throw away 30-100 million existing install base the minute a new console comes out. In the past it was possible since games didn't cost $100-400 million to make.
Console exclusives may not sell the majority of consoles, but they are a major attraction preventing a flood of millions of current console gamers into PC gaming. With the popularity of PC gaming crushing console gaming, any ammunition Sony/Nintendo have for exclusives is going to be their key competitive advantage. Nintendo even considers its IPs as its greatest asset. MS simply decided to join the growth in PC gaming and not fight it - a different strategy. A large part of that new strategy stems from the fact that MS will lose this generation. Thus, for MS, PC gamers are an easy and natural way to push DX12/Windows 10 platform, and get more software sales. Sony doesn't need to push Windows 10/DX12 and they have a much larger install base. Exclusives matter less for MS at this point since they lost this console generation.