-_- I misunderstood what you were saying completely. Does their Xbox division really make money though? Will it continue to make money for them in the future? I've said a bunch of times in the past that I think XB1X will be their last console, and that they will keep selling the XB1X until 2022, while slowly backing out of the console market. A lot of companies see subscription based models as easy money. Why bother making a follow up to the XB1X, and take all that risk, when they can go for what they see as the easy route? Making a console means spending money on console production, and game discs, while taking the risk that your next system will flop harder than the Wii U. If MS has a bunch of money tied up into their console division, and then sales drop off a cliff, they are stuck holding the bag for all the money they spent. With digital or subscription there's no physical inventory or consoles to take a risk on. 

In other words they have two options. 

Option 1. Keep on making consoles and make more money than they would with just OS/Software, but be at a huge liability. (I mean, what if by 2022 console sales plummet for everything but Nintendo? If you were MS would you want to be a console developer in that position? Or what if by 2022 PS5 is a runaway success and MS is pushed back to the Original Xbox days, and their console division bleeds money? Would you want to be MS in that position?)

Option 2. Make less money, but be in a much safer position, while possibly overthrowing steam as the default PC storefront/publisher. (I don't see them overthrowing steam, as being likely, but maybe they think they have a good chance at it.)

Well those ideas aren't exclusive to PC. But I think console consumers would reject those strategies, aside from XBLive and PSN (those are already ingrained in console gaming for over a decade). Just look at the backlash with XB1 and not being able to sell your games without paying a fee to the developer. PC users on the other hand have been used to DRM for decades. They might even embrace subscription based sales models, claiming that it saves them money on games. 

Yep the biggest issue with making consoles is that it is an expense to the developer, but the profit should cancel that out. 

If the console market shrinks by 2022 then Microsoft might back out, but at that point that's more of an industry thing then Microsoft themselves. 

I don't think Microsoft will ever be back to the original Xbox days, quite frankily they're simply too popular in America. That could change though.

My problem is that your post just has too much hypotheticals but admittadely Sony and Nintendo probably would be the only competitors if the console market shrunk. 

My problem with your PC idea is that it would require Microsoft to do a lot of work-arounds in order to make as much money as they make now. For instance:

(1)Microsoft would first have to build a consumer base on their store. They would need to get trust from consumers, which could take *years*. (2)Then, you said that Microsoft could do something like cut the 30% that Steam takes from developers down significantly. Let's say for instance that Microsoft does that, that wouldn't benefit the consumer it would only benefit developers. (3)The most postive outcome that could possibly have is some games being exclusive to the Windows store. Of course, exclusivity only helps a platform when it's a big name, and considering how big Steam's userbase is it's unlikely big games would be exclusive to windows store because of a simple. (4) If this happened though, Microsoft would need to sell 1 game twice to make back the profit Steam would make from the sale of 1 game. (5) Microsoft would also need to have deals comparable to Steam, making them even less money off software sales. (6) Microsoft would need a HUGE, ABSOLUTELY MASSIVE marketing campaign to let the public know that games like Halo, Gears, or Forza are now exclusive to PC. 

It would be virtually impossible for Microsoft to make the same profit off of that kind of buisness tbh.

Also, most PC gamers don't like drm. They just deal with stuff like Steam drm because for the most part it's a fair and balanced system. All you need to do is look at Sonic Mania, for example, to see just how much PC gamers actively despise DRM.

The risk of making another Xbox after the One X isnt that high. They already have an established install base will end up selling 50m+ while having terrible press at the start of the generayion. If they just drop out of the console world they are losing 50m+ users and tens of million xbox live subs. Also they are already in the works of making a new xbox console after the One X.

Microsoft doesnt stand a chance against steam. If they put their IPs on windows store they will sell decently but it will be hard for them to get PC gamers to start using windows store compared to steam to buy third party games. By going the PC route they will be making less money. No xbox live subs, no hardware sales and they wont be able to make as much money from third parties.

If Microsoft really wanted to leave they would have done so after the first Xbox, which was a huge money sink. MS is kind of stuck with the brand because pulling out of the market isn't worth the PR hassle. Xbox isn't essential to MS's profit streams at all, but they have enough capital to keep it going. Xbox is just going to be spread over a multitude of devices, and that works for them.

If they won't pull out of phones completely, I can't imagine they'll abandon Xbox either. At least not for the next few years.

I am curious to know where people are getting this potential 50 million consoles sold lifetime though. They give us no numbers and I'm not sure if they've broken thirty yet.

Microsoft's strategy is to make Windows the center of gaming and entertainment in all rooms of your home - including the office and your living room.

To that end, they are attempting to make the Xbox simply the vessel by which you use Windows 10 in your entertainment space.

If they are successful, they will continue to offer an Xbox-style machine for many years to come, or license others to offer similar machines based on Windows 10. If they are successful, it will be Sony that stops offering Playstation devices, or offers Playstation devices running Windows 10.

If they are not successful, I expect them to conduct a slow withdrawal from the games space, perhaps simply leaving the Xbox software platform as a part of Windows 10 for those developers that want alternatives to Steam and EA Origin.

I don't think so. They're making money hand over fist selling controllers and XBL subscriptions, and the console is selling reasonably well. It is just slightly behind 360 sales at this point. Software sales are fine. The XB division has made them tons of money over the years, and continues to be profitable most of the time.

With that said, I think they will continue to merge PC and console gaming. Hopefully, their strategy will work better than Valve's did. I don't quite understand what their strategy is. I just assume that they have one.

I hope not, but I don't trust Microsoft anymore in the consumer space. I understand they go where the money is, but I've experienced the abandonment of so much stuff that I loved recently (Windows Mobile/Lumia line, Microsoft Band, Surface RTs, and even the Kinect) that I don't put it past them to drop the hardware and focus their resources elsewhere.

I wouldn't really fault them for it, but I'd be as disappointed in them as ever.

No, I doubt it. Didn't they recently promote Spencer to some new high gaming related position? And with some of the things he's said in the past few months gives me the impression they're not backing out of the gaming space anytime soon.

I hope so.

Hopefully it's all gen free from here on out :)

If XB1X ends up a dud, maybe MS will drop the hardware business. If not, we'll get another gen from them. I wonder if they would prefer to make Xbox into a service, like MS Office is now. (Pay one large fee for access to the entire suite of programs for one year.)