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Why should MS invest in hardware, when PC's offer better hardware, run the windows store to share profit with MS and have good enough DRM(as steam shows, and might even be improved by working with pc manufacturers) ?

Most likely in the future, MS will do something similar to steam - just sell software for so called "consoles", and have hardware partners. That will help with the losses issues.

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I think there's a case for MS to make hardware either to show what top notch PC kit looks like or a cheap minimum to stop OEMs pumping out worse than that.

MS don't need to make the consumer device everyone has they just have to force OEMs to not make piles of crap. In a way I think intel kind of own how well MS can perform with hardware. If they didn't push utlrabooks I don't know if we would have gotten anything in the pc space as well built as some apple kit.

I honestly don't know, especially with Valve's Steambox on the way. It was a losing fight from the beginning, and this generation is already doomed right from the start.

But valve is doomed because of linux. MS don't have this problem. They could easily merge xbox + windows on a steam like platform if they wanted to .

That is pretty much what Games for Windows Live is/was. It didn't go very well.

Can you clarify this statement? In what way is Valve doomed because of Linux?

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