and pretty much lose their ass with all the cash grabs?

In 2017 Microsoft’s gaming division had about 9 billion dollars of revenue.

In the last fiscal year (ended in July) that revenue was 23 billion dollars.
Sony: 31 billion dollars
Nintendo: 9 billion dollars? (harder to find numbers)

Microsoft still has 95% of the market share for PC operating systems for gaming: https://store.steampowered.com/hwsurvey/Steam-Hardware-Software-Survey-Welcome-to-Steam

I think they’re doing okay. Just because they’re not number 1 in consoles doesn’t mean they’re dead. 30 million units sold of Series X/S isn’t exactly losing their ass. And all console fans should cheer for MS to keep going. It’s great that Steam Deck and the like are pushing into the market now, but losing Xbox would be terrible. Price, innovation, and quality would suffer if Sony didn’t have MS nipping at their heels.

Why sell lots of one thing when you can sell lots of two things?

I just assume big businesses are run by idiots.

If Microsoft had their shit together, they could’ve made something like Steam. That’s just printing money.

They’re still the undisputed market leader on the PC and their console seems to be doing quite well, too.

Sure, using their OS fucking sucks, but the vendor lock-in is evidently massive for most people.

Microsoft did cozy up to the PC; it just happened to create a console that acted like a PC to hedge its bets and create a new product line.

The initial development of XBox came from Microsoft’s development of DirectX, which led to Microsoft doing a lot of the heavy development lifting required to make a console. At that point, all Microsoft needed was some hardware and it could ship product. So, Microsoft shipped XBox figuring that PC/XBox compatibility would beneficial for developers.

At that time, it was unclear if consoles or PC’s would win some forms of gaming. By making the XBox, a developer could develop for both, therefore defending PC gaming with Windows as an option.

Microsoft also made a lot of money off the consoles, since development costs were lower due to having to update DirectX for Windows as well.

The answer to the question comes from understanding the marketplace.

Microsoft’s vision in the '90s was a computer on every desk and in every home.

In the late '90s and early 2000s, devices like TiVo came on the scene and disrupted the living room. Microsoft started experimenting with Media Center which was a PC that would sit between your cable box and your TV.

Also remember that Microsoft has been in gaming forever. You certainly heard of Microsoft Flight Simulator. Microsoft’s acquisition of various game studios in the '90s cemented their presence in the space.

Anyways, at the time it was theorized that some company would eventually control media flowing into the household through the TV screen and Microsoft absolutely wanted that.

The media center only found limited success, and was kind of a kludgy solution. The first versions of Xbox attempted to overcome some of this by having some media capabilities. The peak of that effort was the first version of Xbox One which actually had an HDMI input and the ability to control your cable box. Had that reached widespread use, Microsoft would have had lots of data about what TV channels everybody was watching and who was watching (remember the first version of Xbox One rolled out with a camera that could recognize who’s watching) and for how long.

Unfortunately for them, that tech was too little too late and streaming services like Netflix were already catching on. Now you can see in later versions of Xbox Microsoft has pulled back and developed game pass which is a steam-like subscription service, and hasn’t really tried to be a TV media player to the same degree anymore.

When a company gets huge, like Microsoft, they can’t really waste time chasing business efforts that might only have revenue potential in the low billions. It just doesn’t move the needle. The problem is that innovating brand new ideas that will eventually become multi-billion dollar businesses is phenomenally challenging. And people who can do that don’t work for companies like Microsoft.

So the entrepreneurs who can potentially dream up multibillion dollar disruptive business ideas go do them on their own and then companies like Microsoft snap them up as soon as they’re able to (if the founders allow it), allowing dominant players to remain dominant without needing to innovate.

This is a very complicated question. Many Microsoft employees would have a very heated debate over the answer to this question. It was the cause of a ton of internal conflict. Many Windows developers saw the Xbox ecosystem as a cannibalization of their existing product.

The move was political. Microsoft wanted to get some of that PlayStation money. They were afraid of losing the living room to Sony. Sony had TVs, VCRs, DVD players, and now this other thing, PlayStation, that also plugged into the TV, that all the kids were essentially demanding have equal place among the other Sony gadgets.

Microsoft already had PCs in homes. Well, operating systems. And many developers would have agreed it makes more sense to blow open the emerging market they were already champions of/adjacent to. But what they didn’t have was real estate beneath consumers televisions. And their competitor had all of it.

It paid off. They were able to secure a fight over the living room rather than allow a competitor to take it on wholly. Pivoting to PC gaming wouldnt have solved this threat. Their goal was to secure a place in “Home Entertainment” markets beyond “Personal Computer” markets. They succeeded.

Edit: It’s the same reason they created the Zune. It’s the same reason they did Windows Phones. They wanted that iPod, iPhone money. They didn’t want Apple to get it all. They… failed here. Miserably. If they had forked android and made compatibility layers for windows instead of forcing the windows experience into a touch screen pocket sized device, steamOS wouldnt be a thing that legitimately threatens Microsoft’s existence.

While I’m cooking here… How long until Adobe realizes that the steamOS route would be genius for them? They already got customers paying stupid money monthly.

The big tech boys are all founded on explosive wealth created by innovative technology. And they’re all obsessed with recreating that. Capitalism demands constant growth.

So they’re always in rabid competition to grow and expand while also looking for a new market to exploit.

It’s also why Microsoft, Meta, and Alphabet have all been the biggest suckers for AI hype. It would be funny if they hadn’t pushed the entire US economy closer to the precipice.

make line go up

They diversified, and I don’t know if I would say they lost their ass at all. Substance, maybe.

They tried to lock people into the Xbox ecosystem instead of being open like Steam Deck.

Consoles were by far still king in the 2000s when the OG Xbox released.

And Microsoft probably likes being able to control its own ecosystem and make players - play by their rules.

They tried that with forcing an online subscription for PC with Xbox Live, and PC gamers simply didn’t play Halo then. You can’t force PC Players into greed, they have too many options.

Can’t remember the name, but there was a Finn in charge if Nokia who ended up running that into the ground through a series of bad decisions to the point where MS could buy Nokia for cheap. And he ended up in a leading position (might even be that he was CEO, I don’t remember) around the time when MS really accelerated their enshitification focus.

Because when you make the console you get to charge anyone who wants to publish a game for it anything you like. Microsoft made money on every pc sold with windows, but not every game sold for PC.

Same reason EA, UBIsoft and every other big publisher tried to launch their own Steam competitor. To ideally make money from someone else selling their game on their shop, but worst case just to be able to make negotiate a better deal from Valve.

Greed. Can’t be content with what you got. Always need more.