I am not champion Streaming, i am pointing out the buisness/industry direction. I would always prefer to game natively.

Why do you think Google wants to purchase ABK? To boost their Streaming network by offering the best selling content. Same reason MS want ABK.

We arent talking about Streaming now, we are talking another decade from now where majority of Hardware simply wont be reasonable anymore for companies to produce. When majority of the market push the narrative of no hardware required, everyone will be jumping on board weather they like to or not. 

A new generation of gamers are born every year. Streaming will surely improve in 10 years to the point that their will be little difference and issues. New gen gamers won't know any better. They were born with touchscreen devices in their hands and phones that can do everything.

MS are already in position to go full throttle into it, so its just a matter of time before everyone follows. Hardware is like phyiscal games, PCs rarely support phyiscal media because digital has taken over. Streaming is clearly the replacement of hardware just like digital replaced phyiscal.

Here is the point I believe you are missing Azz about Cloud streaming.  Think about when Sony was promoting PS Now and when MS came out with Gamepass.  The difference between the two was that MS created a download games service first instead of trying to promote XCloud.  How did Sony respond, they did double down on PS Now to compete, no they created PS+ instead because even Sony realize that Cloud streaming is not where the market is going anytime soon.

Why would Sony push PSNow when they are the market leader in high end consoles? They are not going to cut into their own lunch until they are pressured in doing so. PSNow exists for a foundation of the future. Was never meant to replace hardware anytime soon.

You keep bringing Google up but that boat has already sailed.  They failed, dropped Stadia and probably will not revisit it if ever.  It doesn't matter what they intended to do, the market wasn't ready for a full on cloud streaming service and it probably will not be ready for a very long time.  Why has Sony really done nothing with PS Now.  The main reason why Cloud steaming like PS Now and XCloud has not taken off because its a huge investment in hardware to get it working on scale and its not driving revenue.

Google failed on their buisness model not because of Streaming. They failed in offering better deals and benefits to their customers. Example: Lack of games, High game prices and over promises.

So this drives my point.  The industry isn't going towards cloud streaming as a main gaming platform but more as a supplemental add on to existing hardware.  Its there to allow people to continue to experience their games when they are not on local hardware or they want to continue the experience on their mobile device while out or about or maybe when the main TV is in use.  What Cloud streaming is not is a replacement for local hardware because the experience isn't there, the investment isn't there even from MS or Sony and current ISPs make it expensive for the average household to support.

At the moment it isnt, but this isnt about now, its about later. How many people go out to buy Blu Ray Players and Movies on Disk now that they have options like Stan and Netflix etc. Think about the average person not the hardcore audience here.

So by the time streaming replacing hardware is a thing where MS could rely on it to drop local hardware, every OEM would be dropping local hardware.  MS as the 3rd wheel cannot dictate the market.  We seen how bad that went when they came out with the Xbox one.  The 3rd place vendor has to always provide near or better experience then the leader or what happen is exactly what happen with the Xbox one.  

Xbox wasnt the 3rd wheel leading into the XB1 gen. Thats debatable. Cloud isnt ready yet, but the way the industry is moving forward, we are seeing corps double down on buying publishers and studios because qauntity of content is what drives Streaming services.

During the ABK merger with the CMA, MS stated they can only support 1000 UK users on XCloud at one time.  That in itself should tell you how much MS is not in a position to go full XCloud if the second biggest region for Xbox sales is that limited in XCloud support.

At the moment. You ignore the fact Technology will always improve.

I had wrote a long rebuttal but I believe we can sum down thing to a few major points.  Your arguments from what I gather is that MS is losing money on hardware.  We have established that XCloud runs on MS hardware.  It will continue to run on MS hardware now and in the future so how exactly does MS not still invest in creating hardware when the major part of your argument still exist and MS will need to continue to need to invest in future hardware to keep XCloud ahead of the pack especially with newer games and compatibility.

Are you referring to the hardware needed for their server farms?

If so, building hardware for XCloud and selling hardware at a loss to customers are completely different. MS wont have limitations on building powerful hardware for their Cloud streaming services, if they dont have to worry about selling that hardware to the average consumer at a loss. 

They can come out tomorrow and tell Devs, XCloud has 90TF GPUs, help yourself. That can entice major devs in cutting loose on console limitations and just go bang with whatever game they want to make.

Also if the hardware is losing $1 per console sold and they sell 50m consoles, thats money down the drain. Phil said the Series consoles are losing $200 per unit. Thats a $10b loss at 50m sold. The more they produce the higher the bill gets.

They can avoid that bill by simply moving away from it. They have the infrastructure to do it, its just timing. Like Digital and VR, it will take time to grow and it will grow as tech improves overtime.

And how much will it cost them to run the games on their servers, provide 90TF GPU performance + appropriate CPU performance and stream the individual results to 50 million xCloud users for 5+ years instead? Including hardware costs, electricity costs, cooling costs, costs for the additional buildings, costs for maintence and support...?

Of course not every user plays 24/7, so they won't need 50 million systems for 50 million users. But the costs for Microsoft rise immensely for every "teraflop" they give their users additionally, so I doubt they would be that generous. 

MS own Azure and their infrastructure, the best part of it all is with or without Xbox, Azure will still exist. Adding Xbox to the Azure Cloud network will cost nothing since its already an operational business model under MS. So MS will pay the bills, the same bills they are paying now. They wont have to worry about losing $10b on hardware sales.

Are you referring to the hardware needed for their server farms?

If so, building hardware for XCloud and selling hardware at a loss to customers are completely different. MS wont have limitations on building powerful hardware for their Cloud streaming services, if they dont have to worry about selling that hardware to the average consumer at a loss. 

They can come out tomorrow and tell Devs, XCloud has 90TF GPUs, help yourself. That can entice major devs in cutting loose on console limitations and just go bang with whatever game they want to make.

Also if the hardware is losing $1 per console sold and they sell 50m consoles, thats money down the drain. Phil said the Series consoles are losing $200 per unit. Thats a $10b loss at 50m sold. The more they produce the higher the bill gets.

They can avoid that bill by simply moving away from it. They have the infrastructure to do it, its just timing. Like Digital and VR, it will take time to grow and it will grow as tech improves overtime.

Are you referring to the hardware needed for their server farms?

If so, building hardware for XCloud and selling hardware at a loss to customers are completely different. MS wont have limitations on building powerful hardware for their Cloud streaming services, if they dont have to worry about selling that hardware to the average consumer at a loss. 

They can come out tomorrow and tell Devs, XCloud has 90TF GPUs, help yourself. That can entice major devs in cutting loose on console limitations and just go bang with whatever game they want to make.

Also if the hardware is losing $1 per console sold and they sell 50m consoles, thats money down the drain. Phil said the Series consoles are losing $200 per unit. Thats a $10b loss at 50m sold. The more they produce the higher the bill gets.

They can avoid that bill by simply moving away from it. They have the infrastructure to do it, its just timing. Like Digital and VR, it will take time to grow and it will grow as tech improves overtime.

Yes you are right, there is a huge difference between only making hardware for MS server farms which is comprised for XCloud with Series X and making it to sell to customers.  The same R/D you mentioned still has to happen, no matter if you building it for the server farm or you are building it for customers.  There is a big difference you seem to be missing.  When MS sells to the customers they recoup that cost with game sells and services.  MS cannot recoup that cost if that same hardware is running in a server farm.  This in big business would be considered a loss for each piece of hardware added to the server farm.  So how many subs would it take to overcome that lose.  This would mean MS would be reliant for all their revenue from XCloud which as we have stated is no where close to being a viable solution over local hardware.  So now MS would lose all the revenue as we stated again from their services running on local hardware.  You lose all your sales from games being sold and played on your local hardware, you lose license fees for every game that is sold on your local hardware.  

It really appears you do not fully grasp the business model.  GP cannot survive on XCloud alone, it would not work.  MS would bleed money and the games division would be operating in the red for years if not longer.  How many subs would it take to not only over come all the lost revenue we have talked about before but also lose revenue in all the studios making games.  Those are also cost you have to consider as well because its not cheap making AAA games and if MS is purchasing more studios and publishers to make GP a service that has first party content every quarter then how much of a cost is that to the gaming division.

So if MS is losing 200 per console, how much are they losing per server farm without selling to consumers.  How do MS continue to sell their services on top of hardware and fund game development and the cost of upgrading that hardware cycle.  Nothing that you have stated comes close to making that a reality.  50 million subs is not going to cut it, it would take something north of 150 million which MS is no where close to accomplishing.