However, software and services revenue was up in FY18 Q1 by 21%. The report cited the increase in revenue was driven by Live transactions and offset by lower revenue per transaction. As a result, there is no evidence to suggest that Game Pass (which launched in June 1, 2017) had a negative effect on software revenue.

In addition, PUBG (well, the Early Access version) launched on the XB1. With the huge player count and suggestively, high unit sales that it quickly garnered, seeing the software revenue being down YOY is a little surprising.

You are not understanding me. Im not arguing that the future might not be service baase, or full online service. Im telling you even if it where, it would stay afloat the same way consoles stay afloat. By having exclusive games that make you want that service over the competition. SO in the end anything you suggest that the future is, wont be possible if the xbox doesn't hold its player base interest with different games. If sony where to launch a steam competitor, they could stand a chance with their power house of games the would only be available on their platform. 

Investors are public, so yea they have to tell people how much they are making. ANd they started hiding the real numbers since the ps4 started dominating. Probaby investors wont care much cuz MS in general stays in the green.

Sony can do what MS is doing by launching there big 1st party games exclusive much like the Win10 Store however even with big major Exclusives that are not available on Steam doesnt affect Steam which is proof theres more to selling a product than 1st party games.

There are plenty of industry examples that 1st party isnt everything. Having games on the other hand and clever marketing is. 

Lets look back at the Dreamcast, Gamecube and WiiU.. a bunch of 1st party games couldnt win the industry over and the most successful selling console was the console with the most 3rd party games which were the PS1, PS2,  360 and PS4.

Lets look at Steam, tell me how many 1st party exclusive games does Valve make to keep the Steam committee happy? 

Just goes to show its not impossible to be successful without following the herd. 

It all comes down to how the company sees the best way to make money. 1st Party games can be expensive to make which means they have to sell millions just to break even on there budget (Tomb Raider being an example) where as you can be like Valve and make just as much money without lifting a finger in the 1st party catagory. I think MS sees that vision alot better than the other two.

I have already said this to you before as to why MS wont succed by ofering the same thing steam offers. You just dint understand it. And I have touched on a couple of reasons as to why but Ill go over them again for you.

1) Monopoly. STeam is the biggest by far. The entire comunity is already gather there and they are happy. They have plenty of users for muliplayer so why risk a new platform.

2) These platform offer very little. Like you said before, ps store offers almost the same, so does xbox live. Steam just has been around the longest so the back catalog is huge.

2.1) Why bother if competitors offer the same?

2.2) Even if it was easyer to navigate, or faster, I know xbox pc store I hear it is not, people wont care cuz they have to leearn something new for the         same results.

3) steam got to where it was by just being the only one. Nothing they offered was amazing in any way.

Its why I said MS cannot succeed in the pc space as long as they remain how they are. They offer nothing to want people to even venture into their store and browse. Sony on the other hand has a better chance, since they offer a lot of games that are high quality and are not available anywhere else. Not saying they would outright dominate, just saying they have a better chance than MS. MS has to offer something different, games might be the best choice I would say, but there are many things they can do, I don't know those things could be, which is why I will stick to games.

I believe you missed one of my major points. I stated MS have listed many 1st party exclusives not available on Steam and good quality games mind you, like Gears of War 4 and Forza Horizon 3 just to name acouple and it still doesnt fair better than Steam.

Sony's list of games would fair about the same, they are trying with PSNow.

You still didnt anwser my question. How many 1st party games does Valve release to keep there audience interested? You say its all about 1st party exclusives which MS has in its Store yet cannot compete with a platform filled with 3rd party multiplats.

MS have put like 2 quality games on their store, hardly anything, they jyst dont have the dev power. Sony has a lot more and worldwide recognition. And I have said before multiple times yet you keep claiming I dont, but no, even then sony will still not beat steam, at least not for a long long time. I said they would fare better than MS.

I also answer this before eveen though you choose to ignore it, but I know valve dosent offer first party games anymore. I told you they dint need to as they where the only platform on pc for a long time and basicly have a monopoly with the biggest back log.

Also said it very clear many times that is not about first party games, that to compete they would just have to offer something different, quality Games available nowhere else is a good start while I told you there could be other things to offer, but I cant think of anything.

People are buying less games and spending time playing Gaas games. In 2017 I bought less games but spent almost 2 times more gaming than in 2016 cause I spent more time on CoD, Madden and PUBG.

I also buy less games and keep playing older ones lol. But I do not think Xbox is bringing in new gamers. Their core audience is pretty small. I am sure had they be making exclusive games more people would be interested and buy more games.

That's where I am agreeing on, its not how many 1st party games MS can dish out to win over Steam users, Steam is great because its simple, it loads up incredible fast, its library of games is the biggest in the industry and it has nothing to do with the 1st Party support from Valve, and not everyone uses Steam to play DOTA2, I certainty don't. 

Win Store has many great games on it and will only have more when Ori 2, Age of Empires, Sea of Thieves, Crackdown 3 and State of Decay 2 all rumoured to be Win10/Xbox Exclusive. It still wont overtake Steam. Sony will fair no better, they fall short when it comes to there online network compared to Live and Steam. Sony can have all there games on there service and like MS, it wont go past a service with its heavy reliance of 3rd party multiplats and backlog of games, something if you haven't notice MS already doing with OG Xbox and 360 titles for there Backwards compatible program, isn't that interesting, why are they going though all that hard work for BC? To compete with Steam. Unfortunately Sony shot themselves in the foot with that department by using different architectures for there consoles, so they need to rather be remastered or recoded which could take a while and could cost money something MS isn't shy on. 

Steam has a huge chunk of the PC gamers support and that's a clear vision for MS to compete with, that's where the money is, not investing billions into Hardware that will be replaced in 7 years only to be investing more billions into the next, always chasing tail when it comes to Hardware where as Steam? they need not to worry, they have the largest community in gaming and they dont need to worry about investing billions into 1st party games or Hardware, its crazy to think how much Valve much save on a service like Steam.

MS probably laugh at this type of stuff when people complain that they are not selling enough yet MS are racking in a small fortune in Live members and focusing on boosting that number by offering Game-Pass etc. MS just doesn't give a damn about Physical sales anymore and since they are a software company at heart, it only makes more sense. There next big step is Steam.