I think we're fundamentally opposed on a few things here Ford. I've experienced Windows 8, and I don't think that it is unusable. The interface is poorly designed for non-touch screen devices, but that doesn't mean it's unusable. I choose not to buy the OS for myself, and recommend others avoid it to show MS that the OS is not acceptable. None of this means I can't use it in a pinch, or that it would even require more than a face-lift to be Windows 7.2.
As far as the phone, that's a joke. My experience with windows phone has always been on higher specification hardware. I'm not exactly sure what your experience is, but you seem to think that a $300 phone (off contract) is where people start. I'd contend that the no-contract phones are proving that people will overwhelmingly buy a $50 phone with a $50 a month plan (
http://www.forbes.com/sites/tjmccue/2013/05/22/no-contract-cell-phone-plans-grow-in-popularity/).
Windows phone 7 isn't represented at all in any of the no-contract plans. It is gaining market share from Apple, but that's like stealing a lollipop from your sibling. Your sibling used to be cute, and get the most candy trick-or-treating. It's been five years since then, and the new kid down the block is much cuter. Neither of you have the market share you once had, and simply stealing from one another doesn't attack the kid down the block.
While Windows phone 7 may be the greatest thing ever, it isn't targeted well. MS says it's efficient, yet it isn't getting the shelf space of the latest iphone. They say that its integration is better, but most people draw an artificial bubble between the connectivity platform of the phone, and the ability to get actual work done on more substantial devices. It's this dichotomy that MS seems to not get, and be why Windows phone 7 isn't moving like it reasonably should be.
Back to the topic at hand, MS has no reason to release their console exclusives as PC port. Assuming MS wants to justify the Xbox as a worthwhile purchase, they have two options. The easiest is to have games exclusive to their console, or what is colloquially known as extorting purchases via taking games hostage. Their second option is to make the Xbox something more than a simple console.
Examining the first idea, MS has kept their games exclusive for this exact reason. They've had a Halo port years after the console release, and they linked Halo 2 to purchasing Vista for no reason. That demonstrates the ability to port games, but the lack of a willingness to do so. This is a self-serving decision. If the PC port of an Xbox game looked distinctly better, then why buy the console? One immediately hits upon some aggressive DRM, but if MS really wanted to make DRM transparent they could have built GFWL to work like Steam. Nope GFWL was broken, computer gamers are all thieves and pirates, and perfectly portable games languish as console exclusives.
The second idea has been painfully demonstrated by MS. When they began "selling" the Xbox one they started with how awesome it'd make watching TV. Following that, they sold the DVR features, and even the connectivity to streaming services. MS began the pitch for a new console without demonstrating the games that new
gaming console would play. Combine that with a mandatory Kinect, unexplained forced internet connection, and basically screaming that the new console would be an HTPC and you've got a console that can't function as a console because it's too bust being a half-dozen other things.
I'd love to see the day when MS releases a piece of hardware, and their own paid for OS. That OS would have everything stripped from it except the bare essentials for gaming, and have each of those systems tweaked such that even a $300 vanilla box could play games a few years old without any problems. Their hardware could be a $400 PC, which would have profitability from the day the first one was produced. Despite their base console being the $400 model, you could install their OS on a $2000 machine and play everything beautifully on your 4K monitors. None of the modifications for that OS would even be very difficult. Bake DirectX into the install, remove the Windows UI and replace it with a modified Xbox dashboard (oh look, that console has a much broader purpose), have updates silently install during idle times (similar to Steam), allow store integration (initially offer Steam and Origin, but eventually expand the selection to other stores) for your own profitability, and make all of this a 64 bit exclusive to spur developers to continue development of software that will require new hardware to run it.
Of course, this whole idea is the Steam OS. Valve stumbled on it first, and they're trying to make it work with Linux. While I applaud the effort, MS could quash them with a new gaming OS that any idiot could install in half an hour, would cost as much as a game, and have access to all the games released in the last decade. MS wouldn't have to fight the battle of developing software for their OS, because they already have a death lock on the history of the gaming industry. MS has failed to realize this for the last several years, and priced themselves out of the competition by offering $130 (assuming you buy an OEM license, more if you buy retail) OS options which make a mid-range $400 gaming rig a near impossibility. If the people at MS could divorce themselves from their own corporate culture they'd be making even more insane amounts of money.