Slim Version is Much cheaper to produce, and does not change nothing for the Specs of the Console, they just do Trivial things better,  like Loading, Streaming, Storage Capacity, and does not Split the User Base.

No it would be the minority of time that they have the most powerful console and never the best power to price ratio. Plus games and game engines will never fully utilize the best out of the new models. Oculus Rift will definitely not be on XBox if they release in 1 year. Specs would have to be finalized already and no way a gtx 970 would make it into a revised $400 or $500 model. Of course a revised version like Morpheus could work, it can even work on XBox One now if MS wants to, yet not the OR with the VR games that are coming to PC.

There are ways they can finance this by adopting the cell phone or cable provider model. Raise the price of Live Gold and lock you into a 2 or 3 year contract on purchase. They tested that out already at the end of last gen with rent to own 360s. Or go the full cable provider route and rent you the box for $25 a month, $30 including live and replace it every 3 years.

More incremental upgrades simply means lowering profit margins compared to the 7 year cycle. That money has to come back from somewhere, either by less powerful hardware, ie running behind the curve, meaning only being more powerful for the minority of time. Or by raising the asking price somehow, either by higher live fees with contracts or more expensive consoles. (Which would look bad compared to much cheaper slim models from the competition that still looks almost as good)

What you want is the same experience as someone who upgrades their GPU every few years. Yet you want the full redesigned, rebalanced box for the same price as the gpu upgrade. It's not going to happen.

And if the competitor has a more efficient profit model, with overall much better power to price ratio, and has the time to get the best out of each iteration, with plenty of games that can only be experienced there, a unified userbase, guaranteed support for the entire lifecycle. Who do you think the majority of users and developers are going to choose?

This comment alone is why this discussion is now over.

We're not debating whether or not it will happen, we're debating whether or not it's a good idea. I mean you only have to go back to the X1 launch to find a time where Microsoft put out a very carefully thought out plan that consumers absolutely and wholeheartedly rejected - to a point where they did a complete 180 on their entire console philosophy.

Tell me how this is really any different?

The userbase wont be split. All versions sill play the same games. Just the newer versions will have more high pc sets turned on.

Its different because you dont have to upgrade. The choice is yours. Same Pc guys don't have to buy every new gpu. They have a choice.

The developer doesnt have to do anything different from what they are now. Lok at Sea Of Thieves or Halo Wars 2 as great examples. The developer can just leave in higher PC graphical settings for the better version. And use lower PC settings for Version 1. Same way PS4 will run games at lower graphical settings. If this was a PS4 it woudnt be feasible as it doesnt have the universal Windows Platform.

Forza 6 Apex just announced uses UWP. Gears 4 will use UWP, Sea Of Thieves, Killer Instinct, Halo Wars 2, Quantum Break all use UWP And the developers have already said how easy it was to scale up the visuals with little work for the PC versions. Same would apply for a version 2 Xbox.

Of course the Xbox would be more powerful more frequently. Lets say the PS5 released in 2020. 7 years after PS4. It would be coming out against an Xbox with 16gb ram etc etc. Then in 2023 An new xbox version would release with better specs than the PS5. And again in 2026 another Xbox version to further the gap to PS5.So while the Playstation would have 2-3 years of a small power advantage. Xbox would have 4-5 years where its always significantly more powerful.

But the other difference is PS owners wont be able to play PS4 games on PS5. While Xbox owners continue to bring their entire catalog of games from 2013 through with them.

MS Im sure have done the maths. And are going ahead with this plan. Exactly how is yet to be revealed. But for sure we know its not going to be interchangable GPU's, CPUs, Ram etc sold seperately. And anymore lapse time than 3 years would make the model irrelevant as then you might as well just wait and do a new gen like they are already doing in the industry.

Im sure Oculus could be made to work on a version 2 Xbox. Just like the Morpheus runs on PS4 albeit not near Oculus PC levels.

No its not multplatform in the sense you mean.

To play any of MS xbox exclusives on PC you have to have Windows 10. You have to have an Xbox Live account, and can only purchase these games from the Xbox store. The same store Xbox One owners buy from Digitally. These PC versions have achievements just like the console because your connected to Xbox Live. Your playing through the Xbox app on Windows 10. With 3rd party developers putting their PC titles on the Xbox store on PC its controlled by MS the same way they control these publishers putting games on the Xbox store.

Hence why Cross Buy can exist. Buy 1 copy of Battlefield 5 when it releases and you get it on Xbox PC and Xbox Console.

What makes people consider Xbox on PC over Steam?

Steam wont have Quantum Break, Halo Wars 2, Sea Of Thieves, Killer Instinct, Gears Of War 4, Forza Horizon 3, Crackdown 3, Halo 5, Gears Ultimate Edition and so on. All MS First Party games will be available on Xbox PC Store. With full achievements. Cross Platform chat with console users, Cross platform play, Cross Platform buy. Then theres the ability to take a screenshot, then share it instantly on Xbox app with console and PC users alike. Or videos via Game DVR. Stream to twich with no fuss. The list is endless.

Microsoft are unifying ( and have done so already ) Console and PC Xbox players. On my Console I can chat, send a message, see videos etc with my friends on PC. Whereas before PC and console gamers could not interact like this. We arent talking just about a developer making a game Cross play which has happened on PS4. But the entire Xbox experience being on PC. Friends list unified. Everything.

The Messiah is missing very important points.

1.) All the Windows 10 games are lacking even the most basic standards Crossfire, windows mode, and more.
2.) Gears shows how bad the transition can be for sloppy ports
3.) This shows the eSRAM weakness in this strategy. It's what is making things difficult. The only way to make the transition smoother is not optimize for eSRAM which could result in a downgrade in graphics.
4.) Microsoft is never getting back the steam market without Mod support. Who's going to buy the W10 version of Elders Scrolls?
5.) Steam has plenty of exclusives not coming to W10, so I don't think they are worried about sloppy ports without the basic features.

The sad thing is this could of been great, but what they released so far is not going to convince anyone to change. If anything there efforts might make Vulkan look more attractive than DirectX...

So multiplayer games won't take advantage of the extra power to keep the playing field level. No bigger player / car counts, same locked fps and resolution, just a few extra effects. The less the new version differentiates itself, the fewer people will upgrade, the more people will choose the much less expensive older model that plays everything as well, the higher the price of the premium model has to be to justify its existence.

It could become like the tiered launch model of GPUs. Pay close to a $1000 for the latest, $500 for on par, and $300 for a behind the curve version. Of course all still quite behind what you could build on PC for that money or get at the competitor at the lower end. Replacing efficiency with choice costs money, for developers, manufacturers and consumers. It might be on par with mass produced prebuilt PCs you can buy in the store. MS can subsidize the builds a bit, yet small form factor costs money too next to a smaller market to sell to.

Maybe you think it's worth close to a $1000 to pay multiplats at a more stable frame rate than the ps4 with a few more effects. I ensure you 99% of the console audience will not and buy the $300 ps4. In the end, developers are not going to upgrade their engines for every minor improvement. The big advances will still come in generations.