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superchunk said:
They won't.

Its more likely that this will be the final XBox to push technology. I think they'll now focus on the same pattern that Google/Apple/Amazon have shown with full mobile set-top boxes that have some gaming focus.

Basically, they'll change to lower spec'd machines that run an all digital Live system. Probably stream higher-end games so they can also compete with future Nintendo/Sony consoles.

This is an important long-term goal for them in order to keep Windows and Office important. If they lose the living room its only a matter of time before they lose the office as well. People won't want to have different OS in their different environments.

Bingo.

Microsoft is a corporation bent on making money. The third time's the charm. They were promised hefty profits, all they have after a decade+ is net losses on the ordeal, with no end in sight. XB1 is well on the way to being outsold 2 to 1 globally for the generation, the value-add paywalls aren't working, and huge sums were spent on Kinect2 which didn't pan out.

The shareholders would revolt at them investing even more in a losing battle.

It's not all roses for Sony either. PS4 is selling ludicrously well, but if it isn't profitable enough, they won't have another stab at it either, just ride PS4 for a decade and then be replaced with generic streaming tech that isn't dependent on a specfiic local box to work.