My question just a few posts before. How this is being spun into a negative is psychotic.
if you believe they are spending $700M on servers for XBL, seek help.
This is and Azure expansion, nothing more, nothing less. some resources may be tasked to XBL if needed. any talk by MS about XBL being an integral part is marketing, that's the current push in the consumer space, so lets mention it even if the point of this project is way beyond that.
the XBL service currently runs on about 5000. investment in a 60X jump would be irresponsible and totally unnecessary.
maybe they'll offer more games with dedicated servers, maybe they wont, who knows. what we do know is they'll be continuing to expand their cloud offerings, media (music, movies, TV ), data, scalable hosting, web apps, mobile apps etc. XBL probably comes in under scalable hosting. this $700M goes to all of that of which XBL might be a part.