Once upon a time, a young man named Bill had a vision. He saw "a PC on every desk, and every machine running Microsoft software." And lo, it came to pass, and the company Bill cofounded became a gigantic machine for making money, and Bill became the richest man on Earth.
This agreeable outcome was arranged in a most ingenious way. The tedious business of making computer hardware was left to others — so-called "original equipment manufacturers" (OEMs), who sweated away in Taiwanese and other jungles manufacturing machines that attracted ever-smaller profit margins. All Microsoft did was to write the software for the operating system and the Office applications that transformed OEM hardware from expensive paperweights into something that could do useful corporate work.
Because most of the expense in creating software is incurred upfront, once it's been written every subsequent copy is, effectively, free to produce. And because for a long time Microsoft Windows was the only game in the corporate town, all Bill and his mates had to do was collect their monopoly rents. Which they did.