I guess it’s fair to say the cost of the physical stores is too high for the value they deliver, but I suspect they don’t really know how many extra indirect sales or how much more customer loyalty is generated by the physical locations.
A potential area where the Microsoft stores could’ve been great as if the employees were actually knowledgeable and could have answered questions. But I found them to be completely ignorant of anything other than very high-level basics. Several times they told me things that were flat out wrong. It was always more effective to just Google a question than to ask a store employee.
I’ve spent a lot of time in Microsoft stores in malls, killing time, since there’s nothing much else for me to do when I’m dragged to a mall. Frankly that is the saddest aspect about this announcement. With Radio Shack gone and most GameStops gone, the Apple store will now be the only non-clothing store in malls.