I don't really see a point in totally ending the Xbox brand. It's really only "poisonous" in Japan, and the cause of that probably goes well beyond the brand name. The Xbox is a known, fairly popular brand in America, where the Xbox, Xbox 360, and even the Xbox One have all either done decently or well.
Should MS have different priorities for their next box? Most definitely. While I personally love having it combined with my cable box on a single input, making an all in one box as opposed to something more gaming oriented like the PS4 clearly isn't a winning strategy
I think the biggest change MS needs to make in terms of branding is simply teaming up with a Japanese developer in Japan. Provide exclusive, first party content through that company that can attract Japanese gamers, and change the name and design fo the box to things that will better attract Japanese gamers. Utilizing this new name in Europe might not be a bad idea either.
In America, however, the Xbox brand should continue to be the name of Microsoft's consoles.