More like MS upper management realized they lost the Console War.Maybe time for a gaming industry crash some people are saying
Sony beat them for dominance in the TV / Living Room.
No point in continuing the fight.
Nintendo owns the Hand Held Market and merged their desktop experience into their hand held as a hybrid unit.
Steam owns PC and with Steam Deck and the up coming Steam TV unit, it's encroaching on MS' normal domain.
So to prevent Steam from running rough shod, they're pivoting to a Xbox like Console Interface for PC and trying to bring that to PC gaming and migrate the remaining ~30 million loyal Xbox die hards to slowly convert to a PC like platform.
It's going to be brutal for those remaining Xbox fans, but their only option is to either convert to Sony if they really want a physical console, and say goodbye to the previous Xbox collection, or convert to Windows based PC gaming.
Any next gen Xbox Console is only going to be a "Last Hoorah" as a Console attempt to slowly migrate them to Xbox style Windows based PC gaming.