It’s because of the idiocy of p&l tracking. The hardware, store, and games all need to be independently profitable.
Once they are, they all need to be more and more profitable.
Finally when it’s no longer profitable fire half the people and strip it for parts.
They’re already dead, they just don’t know it yet.
Sounds like an opportunity then for you to create a competing company that functions the way you feel it should function. If that's what people value, you'll take all the business since you're the only one offering it.
They lose money on every dollar they invest overall in xbox as a business. They pretty publicly documented this (which is unusual for Microsoft).
Overall gaming is a dying business. Everyone has a pretty powerful smartphone in their pockets, and there are so many platform vying for attention. AAA gaming is becoming a smaller fraction of the overall gaming pie, so I would expect prices to go up. Mobile gaming usage is up from 42% -> 55% from 2017. Even based on analysis from Steam's data, Indie games are 48% of sales, vs 24% in 2018.