Volcatis is correct. MS makes the OS, but makes hardly anything from PC gaming.
Microsoft makes money for every single 3rd party 360 game sold. Every single accessory.
Microsoft makes no money for 3rd party PC sales. $0 from WoW. $0 from Steam. No money from a $500 PC graphics card, and nothing from a $100 sound card. MS gets the same regardless if you buy a $400 pc or a $2000 gaming machine.
Games for Windows Live was their half-hearted attempt to extort a monthly fee from PC gamesr, but it failed. Now they would rather focus on the platform where they have total control over everything.
PC gaming would be better off without Microsoft at this point anyway.
The bolded statement is not entirely true, actually. They indirectly make money from those products by having the publishers get their games approved for the "Made of Windows" stamps on the box. The publishers have to pay (actually a fair amount) for that process. I believe the cost is per-product, and not per-unit-sold, however -- thus WoW costs the same as any no-name generic shooter.
Really? I always heard they never made money from having games "stamped", and to be honest I don't believe developers/publishers would pay to Microsoft for it.
GFWL had so much potential - it could rival and surpass Steam, but Micrososft started screwing everything right from the start with the monthly fees. Then came the waiting period before they finaly gained some sense and made it free... however they improved almost nothing, and it just feels dated. Hell, Stardock's Impulse is doing what they should've done at any point.
I was rooting for GFW a couple of times: when it was announced (until they screwed with the fees), and when they made it completely free (but lost my patience)