Microsoft received a fair bit of consumer outrage for its backtracked push to make the Xbox One platform digital first and foremost, but market trends suggested that for most people, it would've been fine. The company eventually succumbed to market pressure, largely dropped their digital focus, and settled into second place for this console generation. Microsoft did, however, come out with a pseudo "universal" games and media store.
The Store originally launched with Windows 8, and Microsoft has for years been trying to grow it into something people would actually want to use. By most accounts, the company has failed. Meant to be a place for people to access applications and media that could run on any Windows device through the use of a new container, Microsoft was hoping to build a giant cross-device store. Application support included Xbox, Hololens, mobile, PCs, IoT devices, and more. Microsoft instead ended up with a dead phone platform, a hated Windows 8, and complaints (many of which were based on factually inaccurate claims) about the direction Microsoft was taking Windows, broadly speaking.
At first it was set up to use the same somewhat ridiculous 30/70 revenue split that Apple, Valve, and Google use, but without the users and market power, the Microsoft Store spent years without many seriously investing in it. In 2018, Microsoft announced (and just confirmed) a general 5/95 sharing agreement for most apps, but games will retain the 30/70 split. This makes it one heck of a tough sell. No users and high costs is the Microsoft Store position.
The story of the Microsoft Store today is one of a generally good idea languishing without the resources it ought to have to solve the problems it faces. Search and app discovery have long been a mess (literally for years), and little has been done to rectify it. It's possible that Microsoft doesn't even know how to fix it. Subtle UI refinements have made the store look slightly better, but it's still impossible to separate the actually decent games from the masses of terrible Bejeweled and Candy Crush clones. One look at the "Best selling games" shows you the trouble the store is in and has been in for years.
The store does have a few standout features, such as the Microsoft Game Pass, a subscription that gives you access to well over 100 games (and growing) on PC or Xbox One (depending on the game), from the original Xbox library right up to current releases. There's also the Play Anywhere program, which allows you to buy a game once and then play it on either Xbox or PC, with synced cloud saves. Microsoft's Phil Spencer is on the record saying Microsoft will be launching Game Pass "on every device." Rumours abound that it will be on Nintendo Switch as well, and maybe even the Playstation, although it seems unlikely that Sony would allow such a thing.
Microsoft engineers are also working on a cloud streaming service known as "Project xCloud" that should power gaming experiences on even low-end devices. Apparently any Xbox One game can be deployed on Project xCloud with "no additional work." Microsoft is also rumored to be announcing two new Xbox models at E3 this year, one of which is specifically designed for game streaming.
Microsoft is currently making quite a large investment in this regard, and if it pans out, many people could really buy into a Netflix-like gaming solution on any device. There could be enough interest, at least, that it could potentially threaten Steam and the markets that have grown around this concept of local gaming. Many people thought cable TV and physical media were here to stay, and yet both of those industries are crashing as more and more people flock to Hulu, Netflix, and other streaming solutions. Accomplishing the same thing for gaming would be quite a coup.
Whether people eventually buy into this service remains to be seen, but more platform-agnostic gaming and fewer technical concerns would be improvements. Microsoft has and is making significant changes to the way it operates its gaming initiative, and much of what it's doing looks potentially quite beneficial to consumers.