I think this is the answer. It seems like Microsoft is laying the foundation to go all-in on cloud gaming and/or gamepass. I think their ultimate goal is to dip out of the console wars altogether and be at the forefront of what they think could be the next frontier in gaming.

Honestly, it's kinda smart. Idk if cloud gaming could really be the future (at least in the US) until we have better infrastructure and access to fast/reliable internet without data caps is more ubiquitous, but carving out a niche for themselves instead of locking horns with the competition is pretty clever. It's worked for Nintendo. Most PC and console gamers I know also own a Switch, in part because of the quality of the exclusives and in part because of the relatively accessible pricing of the console, but also because the Switch hardware offers a unique experience (well, it was a lot more unique pre-Steam Deck).

Well, we know there will be a PlayStation 9 in 2078! Evidently console lifecycles will start to get very long.

But in all seriousness, I had the same thought about Xbox. One more console and then I think they might throw in the towel and become only a developer and publisher, like Sega did.

I hope not. I like Xbox and I like competition.

I do think we'll continue to see Nintendo and Sony consoles. I also think if Microsoft exits hardware that we'll eventually see other, smaller competitors attempt to enter the market—and likely fail within one generation. Think efforts like Google Stadia.

Back when Atari was king there were still a glut of competitors: Odyssey 2, Intellivision, ColecoVision, etc. There was technically an Odyssey 3, but all were failures and the companies quickly exited the market (including, ultimately, Atari).