Microsoft should never be allowed to buy another publisher... why were so many people cheering for them aquiring Bethesda and then Activision Blizzard?

The other ones are unfortunate, but shutting down Tango who essentially released their biggest fan favorite last year has to be shooting themselves in the foot. A few years back it seemed like player goodwill was the one thing Xbox had going for them, but while they’ve been buying their way to more and more revenue, it seems like that goodwill has been moving in the opposite direction as they prioritize it less.

If they continue along that trajectory, they could end up in the shoes of companies like ABK and EA that continuously traded away their rep to make bigger bucks to the point where eventually the damage was irreparable. And sure, just like with ABK and EA that won’t prevent them from being a successful business, their massive collection of IPs makes sure of that, but there won’t be many people left cheering for them if it comes to that.

MS has lost their identity. So generic these days. The OG xbox had a great identity with KOTOR, morrowind, halo, ninja gaiden, fable, JSRF, otogi, Orta, etc.

Edit

Basically xbox had unique titles, now xbox is just generic and like other hardware.

You are absolutely right. We the nerds just easily and happily overlook that because we like to indulge in our sportsclubfan-like enthusiasm for the companies that make our beloved hobby exist. But they are corporate, not philantropic entities. 

1. Phil, Matt, Sarah - even if they play video games themselves, they are not your buddies; they are not XBOX game studios' employees' buddies (they are, so much for console wars, more likely to be buddies of the other higher up millionaires from the competition). 

2. a) What they do and say answers to the interest of the company they are employed by. That might at times overlap with your interest as a consumer, but don't mistake that for that your interest has priority.

2. b) What they do and say today does not guarantee you that they do and say the same tomorrow. 

3. The company by its very nature demands profit (and a lot of profit, not just a little bit- "good can easily be not good enough"). Art, innovation, creativity, the well being of the teams, all that can be appreciated if it is helpful in achieving profit, but it's a means to an end, never an end in itself. The end in itself is profit. Decisions will be made accordingly.

That might seem self evident to many and you don't even have to see it as a bad thing (if you believe in capitalism you maybe think these mechanisms actually are a good thing), but a lot of fans in the gaming community don't acknowledge that. And thus they are surprised now.

Software sales notably expanded when PC is taken into account which both MS and Sony now support.

Yes, for sure but it also comes with up to a 30% cut and some impact over sales you would have made on hardware, overall the benefits far outweigh the drawbacks IMO but it's not a silver bullet solutions either.

AA and AAA games cost more now to develop, but prices have also increased especially in Europe, and Sony games are retaining their prices much better than a few years back without selling less.

The rise in cost is symptomatic of the issue, for like 30 years the market did not raise the base price of games absorbing rise in dev cost with the market expansion.  Now they had to rise the price of game because budget increase have drastically accelerated while market have stagnated.

Can you refer me to where it was shown that SM2 needs to sell 10 million to break even?

Spiderman 2 was expected, prior to launch, to sell 10.5m copies and generate $75m in profits over a $315m budget. Now that's not bad and it's also conservative estimate but it's also one of, if not the most sure bet franchise Sony own.  

But more importantly, why do all games have to be some highend AAA anyway? [...]

Amen

Higher development costs are more than cancelled out by games simply selling a lot more and averaging at higher prices in many cases.

TBF I'm not saying the industry is not generating any profits, the ROI is just down compare to what it used to be and enough so that investment are perceived to be better spent elsewhere. Also there's more to this than just dev cost and market size, like over the last 10 years GAAS have grown to take huge segment of the industry and it create very few but highly successful titles that concentrate player spending making it more difficult for smaller title to make it.

Did Nintendo close down Sora? I could be remembering wrong but I thought that was Sakurai’s decision.

Sometimes Nintendo does some things that leave you scratching your head, but you gotta respect them.