> at its best

This looks more like simple corporate incompetence. They never should have made those very expensive acquisitions.

Microsoft EEE at its best: gobble up all game studios and then kill them.

"Embrace, Extend, Extinguish" isn't applicable at all in this context though?

EEE requires them to have succeeded to extinguish, not just be incompetent as to close them down.

I don’t think that applies here. They don’t have a monopoly on gaming, there are major competitors in the space, from Sony and Nintendo, as well as Steam/Indie devs. Buying some studios might be anticompetitive in some minor ways, for instance if you’re a huge elder scrolls or fallout fan, but there’s just too many games out there for that to possibly be a viable strategy at a macroscopic level.