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This is why Microsoft would have been crazy to sell the Xbox business

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Harvey Ayers
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Over the years, there's been a lot of anxiety over whether or not Microsoft should sell off business units like Xbox and Bing, seen as secondary to the tech titan's profitable Windows and Office businesses.And despite the Xbox's high level of brand recognition and popularity, Microsoft executives themselves haven't always stood up for the gaming business.If former Nokia CEO Stephen Elop had gotten the Microsoft CEO job, he reportedly would have sold off Xbox, and Bing search, too.Worse, in 2014, Bill Gates said that he would "absolutely" support then-new Microsoft CEO Satya Nadella if he chose to sell off Xbox.

Because while it's definitely been a tumultous few years, the Xbox business is finally poised to help feed back into Microsoft's core business after all, even as the console converges with Windows 10.

Even if all you have is the PC, though, then boom, there are a lot more great games coming.Having more games on the Windows Store in Windows 10 is also a good thing for Microsoft, as it looks to beef up its its lagging app selection compared to the Apple App Store and Google Play Market.Games, needless to say, are popular on every platform — at the time of writing, four of the top five highest-grossing games on the iPhone App Store are games the fifth is Spotify, holding the 1 spot .Race to zeroGames make app store operators a lot of money: Apple, Microsoft, and Google all take a 30% cut of app purchase prices and in-app purchases.

But according to Statista, the average price of an app circa January 2016 is just $1.16, with the average price of a game a measly$0.57.But, and this is important, the MSRP on a new Xbox game on release day is $59.99, both in retail stores and digitally.

Furthermore, even big-budget, $59.99-at-launch games like "Rise of the Tomb Raider" are offering in-app purchases, of which Microsoft can take a cut.Better yet for Microsoft, it publishes top game franchises like Halo, Forza Motorsport, and Gears of War, all of which are coming to Windows 10 in one form or another.That means they won't be showing up on competing PC platforms like the Mac, or rival consoles like the Sony PlayStation 4.

It's an advantage that's hard to match, and it can bring gamers to Windows 10 while also monetizing them.Finally, Microsoft also offers Xbox Live Gold, a $59.99/year premium gaming service that enables online multiplayer gaming on the Xbox consoles, alongside other benefits.It slots right in to Microsoft's broader ambition to sell more subscriptions, notably seen in its success selling the Microsoft Office 365 productivity service.Selling the Xbox Live service to Windows 10 users will be tough, but not impossible — the subscription also includes access to "free" games every month on the Xbox, and it's not hard to see how that could be expanded to PC owners.This isn't necessarily good news for everyone: Apple's App Store has seen some backlash over what Spotify calls the "Apple Tax," as developers resent the notion of giving App Store owners any portion of their hard-earned revenue.

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Harvey Ayers
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