So uh, what does Microsoft do now?

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Intrinsic said:
Dont see what MS can do really..... if the Neo is any indication it shows that Sony is not afraid to revise their hardware if they want. that aside, MS can't do anything significant till the next chip fabrication revision comes along. 10/7nm..... and by that time, everyone will pretty much know that the Sony will have something just around the corner too. All Sony has to do is announce that their nxt console will be fully BC with the PS4 and that's it.

then again, Sony can come out and annouce a $600 console and say TV, TV, TV......

There is no need to wait until next node.  14 nm can easily deliver 4K 60 fps with much higher IQ than currently used at 900p.  The PS4K is essentially the same as the XBO 1.5 that Phil Spencer was saying he didn't want to do.  Next year, MS could release a new console crushing the PS4K.  I find the PS4K odd unless they launch at $299 as they could have released a slim that handles 1080p60 easily and kept the die smaller.  Then the could have launched a true 4K machine in 2017.