I'm going to jump on a few points here. Foremost, they don't need to win a console race. They don't even need to race a console race. The base of their gaming platform is going to be streaming subscriptions to various devices.
Nextly, I don't think retailers actually make that much off disc games. Nor the consoles. I think they only really make any money off the accessories like controllers and headsets and such.
And lastly, the thing about Google abandoning and killing things seems like more of a meme than a reality. They have a ton of stuff that goes nowhere. But focusing on only that seems absurd in the face of the massively successful services they've built. These giant companies all try different stuff that can go nowhere.
If you're not in it to win substantial market share, what's the point?
And if all google wanted to do was push streaming subscriptions to various platforms- they don't need a console to do that.
controllers have margin, but the death of couch co-op (smash brothers aside) means they're not really selling a ton of extra controllers, except as replacements.
on the other hand, retailer margin of a $60 video game is about $15. https://kotaku.com/what-your-60-really-buys-5479698
For a AAA title that sells a few million copies, this is going to be far more significant than the sales from replacement controllers, and there are many of these AAA games released each year. Except for on whatever google's streaming machine will be (if indeed it is streaming only). The margin there will be basically $0. Retail takes these things into account when deciding what to stock, and how much of it has prime shelf space.
We can agree to disagree on google's ratio of abandoned to successful products, but the perception is absolutely out there.