I am naive to the economics of it but I imagine they could also choose to act as publishers where they take a cut of sales on all platforms. I believe their objective is to entice people to buy the console on the basis that it has better games than the competition - not all together bad - but as someone who likes video games I would like them to find another way to compete.

To me the issue is that games aren't required to release on all consoles. Nor should they be required to be, because that goes against the whole idea of free market competition: if all games are required to be released on Xbox, what is stopping Xbox from hiking up their prices? Paying developers for exclusives is the opposite and is competition.

"If you build it they will come", doesn't work. Look at the PS Vita, which very quickly stopped getting Sony support for games and languished. It shouldn't be up to all game developers to release on Vita, it is up to Sony to attract developers.