No, the REAL profit is in the inordinate 30% app store fee for releasing an Xbox game... on every digital game! (Boxed works differently, but they get a kick back there, too). Just like any app store, the devs take the full financial risk and MSFT gets risk-free revenue.
Now, the problem is they're a third place console. Nintendo and Sony are kicking their butt (and Steam on PC). A lot of devs aren't bothering with Microsoft releases anymore since not enough potential users.
So they had to buy the game studios so they'd have content for their stores, then the customers will come, then the developers, then those sweet exorbitant 30% fees!