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RolStoppable said:

The timing of the launch won't matter much when Microsoft has a bunch of other things to address, but if we ignore these other things for a moment, preparing for a successor rather sooner than later is the logical thing to do. That is, if there's still any ambition to sell a lot of consoles. Although looking at the big picture, the most sensible course of action for Microsoft would be to let this generation fizzle out and go full third party, because if they kept making consoles, they would also keep doing things that contradict each other. Namely that they try to push a console and platform-agnostic services concurrently; this just doesn't work, because it makes the console redundant.

This does make me think that they will drop out of the console business first. 

I'm pretty sure they'll eventually (either alongside the next Xbox or after they exit the console business) release a line of Xbox Gaming PCs that come pre-installed with the Xbox app, include an Xbox controller, and a trial for Game Pass. 

Microsoft is one of the wealthiest corporations in the world, so they could theoretically stay in the console business as long as they're wealthy (no signs of that stopping). But eventually, I think something will give. I'm pretty sure they'll want to bow out with some dignity instead of being like Sega exiting the hardware business in disgrace after all the lost money from the Saturn and Dreamcast. 

Lifetime Sales Predictions 

Switch: 161 million (was 73 million, then 96 million, then 113 million, then 125 million, then 144 million, then 151 million, then 156 million)

PS5: 115 million (was 105 million) Xbox Series S/X: 48 million (was 60 million, then 67 million, then 57 million)

PS4: 120 mil (was 100 then 130 million, then 122 million) Xbox One: 51 mil (was 50 then 55 mil)

3DS: 75.5 mil (was 73, then 77 million)

"Let go your earthly tether, enter the void, empty and become wind." - Guru Laghima