It is obvious by now that Microsoft wants out of the game console bidness

Making game hardware ain’t fun. It’s high cost, low margin, very competitive and a company must provide expensive post sale warranty service at least a year after the initial sale.

Microsoft knows that it will NEVER outsell Sony and Nintendo in hardware and software sales. This would be fine if Xbox could be like Apple or Porsche where they could sell lower volume luxury items at much higher margins. But they cannot, they must price their products similar to what Sony and Nintendo charges to be competitive.

It would be much more profitable and lower cost for them to drop hardware and sell a GamePass cloud dual license: one to OEMs like Sony, Nintendo, Samsung, LG, TCL, Hisense, etc. and subscriptions to customers. They can still make hardware but they would be cheap like a game streaming stick and controllers. Recurring revenue is always better than one time point of sale revenue (i.e., Office 365 is much more lucrative than selling one Office license).

I predicted this a few years ago, got laughed at but this seems more and more likely. Also before the dummies start yelling that Sony and Nintendo would never allow GamePass on their platforms: gamers would send death threats and attempt physical activity for the first time in years to climb stairs to burn down their headquarters if they could not play Call of Duty, Diablo, Elder Scrolls, DOOM, Fallout, or maybe even GTA (don’t laugh, T2 is a ripe acquisition target and Microsoft can afford to buy them while Sony cannot).

Microsoft knows it will perpetually be stuck at third, dropping hardware and going to the cloud or licensing their games for other platforms makes the most sense.

Oh look! Another xbox thread!

I have been disgraced by my overloards at Microsoft HQ

I am cashing in my gamer points for real money as we speak.

So the recent video on youtube disproves this. Microsoft is still going to make consoles but they might be all digital in the future.

It would make sense if Microsoft GamePass had dozens to hundreds of exclusive games but they don't. There's no selling point here to OEMs or consumers. Why would Sony, Nintendo, the PlayStation consumer or the Nintendo consumer subscribe to GamePass to get access to Fallout, Skyrim, Modern Warfare, etc when those games already exist on those platforms? Many Bethesda, Activision, Blizzard titles probably already existing in PS Plus Premium subscription service, too. There is no benefit to Sony and Nintendo ever having a competitor's sub model on their hardware.

Every new generation has the opportunity to redraw the lines, we'll see what happens.

@girlusocrazy: It takes two to tango. Nintendo couldn’t have taken over without Atari making bad decisions, Sony couldn’t have taken over without Nintendo making bad decisions, Microsoft couldn’t have taken over without Sony making bad decisions, and vice versa again after that.

@Willy105: Anything can happen really.

Considering all the studios they've been buying recently I don't know if they'd make that investment and not have them make exclusives for their console. That said making hardware does have lower margins than software unless you're Apple. I wonder what an Apple/Microsoft console would be like, I know it will never happen but it's interesting to think about.