They have abandoned PC gaming and it does annoy me, but I can't say it doesn't make good business sense.The thing is that they don't make all that much money on each PC sold. How much is a single license to Windows? About $100? That's it for MS as far as revenue from most PC sales. They make their $100 and they're done.
They don't just want their $100. (They've been trying to make Windows a subscription service for a long time.) They want constant streams of money coming in from each customer and that's basically what they've finally obtained with the Xbox. They get paid for every game sold on the Xbox, the get paid just for the ability to write games for the Xbox, they get paid for updates released for games on the Xbox, they get paid a monthly subscription by any players who want to play online, and they get paid for every accessory (HD, controller, headset, etc).
It's a much better system for them as far as profits are concerned. They're not limited to $100/4 years. They charge $60/year simply for the ability to play online, use Netflix, etc, they make $10 off every game sold, etc. This adds up quickly, anyone that's really using their Xbox is paying way more than the $100/4 years they used to pay for Windows licenses.