It suddenly just hit me; could this be the last Xbox console we ever see?

First signs pointing in this direction is the heavy XBL integration Microsoft is pushing into windows 10. And the second is that I think by now MS probably accepts that they cannot compete with the PS brand on a global scale. So what to do?

Focus on PC gaming. PC games pretty much already all (mostly) run on windows and are built using windows APIs (by default). When you think of it, there is no reason something like steam should even exist if MS maximized the basic potential they have with windows. Ms could literally require PC games to have some basic XBL support to be compatible with windows, make their own store to rival steam, and just settle for the cut they will get from sales and forgo royalties.

In addition to that, as it stands the only way to get PC games is pretty much to download them, so the platform is already open to whatever kinda DRM MS could choose to impose on games. And if the prices remain as competitive and  devs know that as long as they are using DX12/13 and conform to the XBL TOA, there would be DRM protocols put in place that coukd make piracy obsolete. Any and every dev will pretty much get behind that. 

Make the next Xbox basically be a streaming service that streams games from some sort of dedicated. server like PSnow and Nvidia shield for those that can afford a proper gaming rig and they would still be making a killing in the industry. 

What do you guys think? 

Sounds like ur saying they could force Steam to give them a cut from each game sold, could they do that?

If this is the case, then that means that the PS4 would be the last Playstation console as well considering Sony's push for streaming services and games.

Its ironic that Valve went to all big companies including Microsoft and EA to make steam a reality. But they got rejected. Now everyone wants to be like them.

I think this is quite possible. There have always been a lot of people in MS who disliked the Xbox product line because the brand, as a whole over its lifetime, has never been profitable, despite instances of profit at different points. One major force behind the persistence of Xbox I think was the vision originally put forward by Bill Gates of the smart, fully connected home with a hub acting as the nerve center. I think Xbox was meant to head in that direction, becoming a hub rather than just a gaming device. But with those elements of Xbox One failing to impress and more and more multimedia features being absorbed into smart TVs, I think MS is about ready to give up on the hub notion. With those two points in mind, there may be a sentiment in the upper echelon that staying in the hardware business serves no practical purpose. A lot of people wave off the losses Xbone is causing with the reasoning that MS is wealthy and can absorb the losses so it's not a big deal. The truth is the opposite: MS is wealthy and stable today because throughout their history they have considered sustained losses in departments a very big deal. I think we just may be at a tipping point for the bosses at MS where Xbox is concerned.

Definitely possible, highly unlikely..

Microsofts next console is purely dependent upon whether Sony makes a console. Even though Microsoft does their own thing to stand out in the west if Sony makes a decision Microsoft will try their best to respond to it. They'll most likely do streaming next gen, for sure. Then again, their cloud is supposed to be pretty powerful so if they can get it to work we might even see streaming this gen. 

They want you to play games on the TV so they will have some type of box.

Sony are no doubt heading that way and are already ahead of Microsoft with ps now.  The problem with your post is that Sony are on track to sell over 100m PS4'S and Microsoft will do well to even sell half the number of PS4s meaning a PS5 would likely be very profitable and worth doing.  

ms's recent directions do make it look like xbox will be a name applied to their pc gaming division and that they are going to make it easier to get a pc displayed on your tv so that buying an xbox is buying a pc that just happens to be connected to your tv.

it's not a bad strategy really but i'm not sure as of yet how successful it will be.