[Windows Phone 7 General] emigrating:
Thing is, Microsoft is the top player in the console industry - so they don't have to port games to other platforms. The increase in revenue would likely be offset by the increase in development cost to support the PS3 and/or Wii. Not to mention the fact that Microsoft Game Studio titles do drive console sales (I know plenty of people who have bought an Xbox 360 purely because of Halo for example); higher console sales lead to higher revenue (even if they did initially sell hardware at a loss) as people pay for the XBL Gold service, spend money in the Xbox marketplace and purchase Xbox 360 games (for which MS get's a license fee no matter if it's an in-house title or not).

This is pretty much how the printer/ink/toner industry or coffee-pod industry works also. They sell the hardware at little to no profit but you are tied in to buying their ink/toner or coffee-pods for the lifetime of the product. It's actually cheaper for me to purchase a new CLP every so often than it is to buy new toner - when I then sell the old printer online I more or less come out at zero cost.

In the smartphone sector, Apple is the king of the hill and it only makes sense to have their software available. Apps do not drive phone sales; UX (User eXperience) does. Keeping a title exclusive to WP7 makes no sense at all. At the same time, it does not make sense (business wise) to support all possible smartphone platforms out there, only iOS and Android has a valuable marketplace (app wise) so those are the platforms to support - this is why Google hasn't released their apps as official WP7 clients thus far; Windows Phone 7 doesn't have a big enough marketshare that it pays for them to spend development dollars on it. Once the OS gains momentum (if it does) Google will rather quickly release what they have to offer.

All said, I do agree it's painful when "better" software appears for the iPhone rather than their own OS, WP7, but this goes back to the fact Microsoft are so large. There is no single person making decisions, they have COO's and project managers en masse, often trying to out-do eachother or vote other projects down as they step on their own projects toes. Microsoft is filled to the brim with highly competent people, but they operate like a bureaucracy. Ask anyone who's ever worked there and they'll all more or less tell the same story - the layers of hierarchy is killing creative output.

How many times has Microsoft not come out with killer products which has failed miserably in the marketplace because upper management hasn't seen or understood the possibility. Take Media Center for example, it has given the best UX for DVRs for years - still, they never took it to the next level and now it's almost too late. With a lot of luck their embedded Media Center's showcased (in a back-room no less?!) at CES may make a dent in the market, but it's highly unlikely as they missed the boat. GoogleTV, AppleTV, Boxee and a whole lot of other players are now ruling the roost.

That's exactly what they did with the mobile sector also - they had great ideas and were the top players years ago. But they became complacent and stopped innovating. Then other players came along and completely killed them; what was WM's marketshare last year? How much of that was made up of HD2 sales which were re-flashed with Android?