I’ve heard from friends that there’s no reason for companies to shut down game/store servers because “it doesn’t really cost them anything to keep it up”, which feels wrong to me given how readily console makers are to close up features of older consoles that wouldn’t conflict with newer ones. Is upkeep really that cheap?

Here's the thing - your friends are kind of right but also mostly wrong at the same time. In terms of technology and such, they are correct - running a server process in the cloud today is pretty cheap. We pay for how much CPU time our processes end up using and old games don't use up that much since there aren't that many players, so the cost of running the server itself is not that high.

However...

There are significantly more costs to running a game (especially a service game) than simply keeping the server running. That's where your friends are wrong.

Imagine, for example, a longtime player gets hacked and the hacker deletes her character and items. What is the player's recourse? Submit a ticket to customer service and get it resolved, right? Now we need to keep at least one customer service agent on the service to handle things like refunds, user mistakes, and so on. What if the server crashes? We'll need somebody to handle server maintenance. What if somebody discovers an exploit that severely harms the player experience? I guess we need a programmer who knows how to fix things. If there's any development to be done, there will also need to be production (to keep tasks prioritized and tracked) and QA (to validate fixes).

Remember, the vast majority of the costs of game development are the salaries and benefits paid out to the people working on and maintaining the game. Even a small skeleton crew costs hundreds of thousands of dollars per year in salary, benefits, taxes, equipment, rent, and so on. So... upkeep for the server processes really is that cheap. But keeping an entire game running is absolutely not that cheap. When the service can't afford to pay for its own upkeep - including the salaries of all of the people needed to keep the service running - then it gets shut down.

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