My apologies, I misspoke by writing too quickly: custom blades, dedicated servers.Why would Microsoft be making custom servers in which to insert their custom blades? Why not make xCloud blades that work in any of the variety of these existing server configurations? Do you have a source for this because it doesn't sound right. Or sensible. But does explain why Microsoft struggle with profitability.
As I understand it, Xbox Live also largely also does not run on Azure hardware. As it has been largely around before Azure really took off. I'm not sure if there is any intention to migrate however.