1.) The crux of the issue is that I haven't seen any convincing argument to explain why a substantially worse service would massively expand subs. Like the only path to that, that would make sense is if MS massively expanded their developers. Like if Ubisoft, EA, Activision, Take Two were all under MS's umbrella, maybe? But there's 0 chance that regulators would allow that. Even just Activision seems to be off the table (and it would get harder with every major acquisition.)

2.) On this bit in particular: History show shown time and time again that with 3 consoles, 1 gets burnt.

We have a very small sample size. It's very difficult to come up with conclusions based on how limited our sample size is. 

In a lot of these cases there are extraneous reasons why one of them doesn't do as well, that has absolutely nothing to do with there being 3 of them. PS3, X360, Wii all sold massive numbers. Two of them lost a huge amount of money, largely because they were overengineered, and one of them had a massive hardware issue. Xbox One had some marketing blunders, and issues with their studios. The biggest thing holding the Series S|X back is major shortages, followed by a development pipeline that hasn't been particularly consistent. 

Ill keep this to these 4 points.

1) Steam has been operating almost a decade without EGS and was doing just fine without them. This conclusion of "we need it" is rubbish. No point did Steam step out of line when they basically owned a monopoly. The issue with this type of competition like EGS is they push anti-consumer practices on the industry to steal the market. Its bad competition. I'll give you an example: If EGS became big enough, they might implement a Pay for Online system, and if that happens, that will entice Steam and other platforms to follow suit, just like we seen PS and Nintendo follow Xbox's Live model. You are only defending EGS because you believe in this false narrative of, we need competition. Some competition is fine but not at the extent you are thinking of. EGS has brought nothing but headaches to consumers on PC. PC has always been good with just Steam being the main platform.

2) It's not just Nintendo that will be competing with PS, its also the PC market. You can never make too much money and MS have IPs that will sell. If Sony so no, good luck, Nintendo might take those customers instead, and we know Steam will have them by default so more Console gamers immigrating to PC isn't something Sony would like to happen to their console hardware.

3) MS can literally rely on distributing games without the billions of investing in hardware which doesn't sell. Id expect MS going hybrid to full digital/Streaming next gen or the gen after that.

4) Strange, currently Xbox has the higher rated game over PS in 2023 so far, so i don't see what the point you are making is. They released nothing last year probably because they are holding their cards close to their chest due to the ABK case going on. I wouldn't be surprised if it was self sabotage to make themselves look bad towards the FTC but ill digress. Nintendo and Sony have stuffed up, let's not make this a MS only thing. Nintendo with the recent Pokemon and Sony with TLOU1 PC and Xbox with Redfall. They are not a gen behind, that analogy makes no sense. They were publisher of the year just 2 years ago.

The thing about competition is that it comes and goes.

Many industries had monopolies or duopolies which had zero competition only for competition to come out of nowhere.

Take the operating system and internet browser markets for instance.

After Netscape navigator failed, Microsoft enjoyed what was essentially a monopoly, Firefox then came along and upset the market, Chrome then came along which provided further invigoration in the market... And Microsoft was forced to shut down Internet Explorer and start from scratch to remain competitive.

In the OS market, Microsoft did have a monopoly, then Android came long and the rest is history.

Many design aspects of Android and iOS have had big influences on Windows design language, technology and compatibility for better or worst.

Before Epic Game store provided Steam with competition... Steam was competiting with *Physical* sales.
However, Steam won as they provided four important things that gave them an edge:

1) Larger game variety availability. (Not limited to the selection on a shelf.)
2) Convenience. (Download straight away vs Install.)
3) Price. (Cheaper and more frequent sales.)
4) Better DRM.

It was a no brainer. - Physical did try and compete with more boxed-in value added addons, but it was clear physical gaming was going to go the way of Blockbuster video.
 
Eventually digital competition came and valve introduced basic consumer-rights features like refunds.

Steam has been slow to adopt consumer-friendly ideas and features, it is only because of competition that we got them.

Competition is good.

Sony is selling games to the PC market, or haven't you been paying attention?

PC gaming and console gaming isn't going anywhere, console gamers stick to consoles because they like it... And PC gamers enjoy PC gaming because they like it.
There are gamers that don't care about the politics of the two different form factors and will happily leverage both, but preferences have been set.

To assume that gamers will migrate over to PC if hypothetically... Sony and Microsoft didn't exist in the marketspace is disingenuous, you will have some... Sure. But Nintendo appeals to console gamers as well and they would likely absorb most of that market.

Xbox is more than just games.

Microsoft is selling services. - Servers, search, content delivery networks, movies and tv, technology and more... Which actually become more viable the larger in scale you scale these services.

For example... I did bomb training last week as part of my hazmat technician response... And Microsoft's technology was front and center... This doesn't happen without vertical integration of technologies from top to bottom.
Yes. That is an Xbox controller on a 1 million dollar robot.

I am not sure if you are legitimately being obtuse or trolling currently.

Xbox 360 sold 85~ million consoles.

Xbox Series X/S is currently outselling the Xbox 360 launched align.
https://www.vgchartz.com/article/456726/xbox-series-xs-vs-xbox-360-sales-comparison-february-2023/

Spinning it like Microsoft is failing and not selling consoles is a blatant fucking lie.

You have literally lied constantly through this thread or provided fake information.

This is a conspiracy theory and not based on facts or evidence.

Yes Nintendo and Sony have stuffed up. So has Microsoft. - Especially with Redfall and Halo: Infinite recently.

It's like these companies are run by human beings who make human mistakes sometimes?

1) There is good competition like Nintendo and Sega, and there is bad competition like we have seen with Steam and EGS. I also don't understand your comparison with Steam and Physical media. Valve were still selling physical media and if you remember, you can buy physical PC games that offered a Steam Key. Valve wasn't competing with Physical media; they were using physical media as well.

2) The point here is that you have Nintendo and PC that will be competing for those PS Customers. If Sony say no to Xbox games just because they want to see MS die, then expect a huge marketing push for Xbox games going on Nintendo and PC. Thats a 30% cut Sony is giving up on future Xbox titles. Makes no sense to say no. 

3) Again, 360 lost billions, the consoles were over engineered and were sold at massive losses. The only thing keeping Xbox afloat was their services, which ironically is their entire focus moving forward. The hardware just dwindles behind. Hardware sales does not equal profit, it's the software and services that have to make up the cost of the consoles. The moment they release a new console; they are already billions in debt which they have to recoup with software and subs. That is not Spin or a Lie. Thats a industry fact.

4) I am not sure if you are agreeing with me or disagreeing with me on that response. I am pointing out that its not just Xbox who make mistakes in the industry. You are reinforcing my point here. As for the Xbox making themselves look bad, i agree, that point I made is a conspiracy theory. Hence why I said i wouldn't be surprised and also digressed.

It's not like 50 million XBox One's is nothing ... that's a larger userbase than what the SNES had. That's a healthy enough userbase size especially for MS which doesn't depend on the game industry to begin with.

If XBox Series S/X can't get to XBox One levels, then the problem is Phil Spencer and the team managing the current XBox hardware division, they are very obviously not getting the job done and need to be replaced.

What an interesting point. But do you understand how and where this services revenue that keeps afloat coming from? And that services revenue that is now one of the biggest ever for Xbox. I'll give you one small hint: majority of it is not coming from PC.

Epic Game Store and Steam competing isn't bad.

Correct. Valve was still selling physical media, because they still wanted to sell games. - This is the point of competition. Valve was definitely competing with Physical.

It's like Microsoft selling Microsoft office on MacOS, Microsoft is competing with MacOS, but they will still happily make money off that platform when they can.

You assume that if Sony denies Microsoft I.P on their platform people will go Nintendo and PC?
They also won't. They will also just go without.

Microsoft's I.P currently isn't exactly setting the world on fire.

And it's not just Microsoft's I.P that Sony can deny, it's Microsoft's services, all of them.

The consoles initially lost money, but the 360 did become profitable.

It's actually the normal business model for the market.

But without hardware, Microsoft can't sell services, that is the point of "vertical integration". - It is why Apple is so successful and why it is such a fantastic business model.

Retail supermarkets do the same thing, they will heavily discount a few items and even loose money on them, which will attract customers into their store where they will sell a lot more other products and turn a profit.

You need to look at the bigger picture here mate and you failing to do that.

I don't disagree with all your points and statements, I also don't get into the habit of rehashing the same lie even when it's been disproven.

Just because I have initiated a quote and replied, doesn't mean I am disagreeing with something, often it's an expansion on the original point, not everything is binary in this world.

From PCs and all the other platforms. At the same time, they are removing the billions spent in creating new hardware.

The answer to #1 basically boils down to “uh, because”. There’s zero logic or reason behind it.

That is a lie.
Epic Game Store is providing 100% free games regularly for customers. - That is competition, that is a massive benefit to consumers.

As for paid online... Microsoft's paid Xbox Live! service was competing with Nintendo's horrible free online service with the DS/3DS/Wii/WiiU and Sony's free Playstation 3 online service.

And Microsoft's paid service won. - It offered more bandwidth, lower latencies, more content and had better uptime as well as more support and services for online games leveraging it's comprehensive network. - Remember when the Playstation Network went offline for several weeks after following the hack? Yeah. More investment was needed.

Eventually Sony and Nintendo saw that the best way to compete with Microsoft's paid online service was to move to a paid model with larger investments into their online infrastructure... With regular "free" games thrown in as an incentive.

So again. You lied.

Simple. If a gamer buys a Microsoft game on a Sony platform, Sony might get a 30% cut. - But because Microsoft is vertically integrated, Microsoft has the capacity to side-step Sony's other services to support that game, Servers, CDN's, Advertising incentives and more... So Sony misses out on additional value-add revenue.

Sony also wants to sell us it's services just like Microsoft. - It's very much likely going to be abrasive towards gamepass being pushed on Playstation.

Microsoft is vertically integrated.

Like the evidence I provided earlier... Every part of Xbox flows onto Microsoft's other business ventures from fire/rescue to heavy industry to corporate/white collar to your regular consumers. - That R&D will still need to be invested with or without Xbox as Microsoft will still need to develop hardware and software.

It's literally the Apple business model which has made Apple so successful.