Microsoft is not cut out to make hardware

[Millennium]

jkl2207 said:
maybe they should buy sega out and then get sega to be their console making bit while MS concentrates on software

I doubt things would actually play out that way, but I wouldn't be surprised to see Microsoft contract with another company to produce "second-party hardware." The resulting successor console would still be sold as a Microsoft product, though it would be produced and built (probably to Microsoft's specifications) by this second party.

The thing to keep in mind is that Microsoft got into this market for one specific purpose: to extend the Windows monopoly to set-top boxes via gaming, both from a user perspective (get them playing Microsoft games) and from a developer perspective (lock them into DirectX). Neither of these actually requires Microsoft to build the physical machine, as long as they write the underlying software and license the games themselves. From a business perspective, it makes more sense for them to partner with a company that has more experience with hardware to work on that aspect.