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Microsoft has the resources to do what they want. It wouldn't surprise me if they're simply giving up for now so that they can make another attack in the future. That's what they did with the original Xbox. We also know that you can't predict a generation based only on the preceding generation.

It's also still somewhat surprising how well the Xbox brand is regarded in North America. At work, all I hear about is Xbox. The people who mainly play games like FIFA, Madden, and CoD like it just as much now as they did last gen.

Relative to Spencer himself, I don't think he's behind much of the downscaling we're witnessing now. I think that's coming from above his pay-grade.