...they're going to overbid on a studio that was actively falling apart, after being rebuffed from buying one of the biggest giants in the business[0], all as part of an ill-advised attempt to muscle into a game business they didn't understand?

[0] Microsoft tried to buy Nintendo very early on

I don’t think the margins here are so considerable that we can assume revenue = profit

They can be losing money, but gaining in market share and moat.

Almost nobody in this game cares about profit right now.