Nothing really. MS owns all the IPs.

Some talent may stay at MS. Some talent may open studios which often happens with closures.

What if ms closed all those studios and combined them XD

I'm sure any 3rd party devs, sony and nintendo would absorb any talent they can from those studios. As for the IPs, MS will probably have another studio develope those games or they will put them on the back burner for now.

This is actually good news for Microsoft. They essentially just made their gaming business fail proof. Who knows, XBOX could exist as a separate OS or integrated OS for your PC that can stream wirelessly to a Smart TV. If somehow, Xbox the console fails, the OS could easily take its place on PC. Maybe you can pay for the Xbox OS or something. But with Windows 10, I don't think there needs to be anything like I've mentioned above at the moment. If anything, Sony and Nintendo will just continue doing what they've done since their gaming outsets.

It is not fail proof.  They simply are giving up and retreating to PC.  Essentially making Xbox not a console anymore and instead just a name for a store.  They lose if that's what happens

The impression I'm getting is that Microsoft is no longer willing to throw money at console gaming the way they have before. This would mean that software developers under the Microsoft Studios umbrella are going to have to produce a profit more often than not. My guess is that Lionhead, as an example, was deeply in the red for their last few projects and Microsoft had enough. Be profitable or be dissolved.

Sony, on the other hand, seems content with taking modest losses on many of their games if the end result is strong sales for their hardware, which in turn boosts returns on all software. This is great for the consumer but it's probably a lot harder to justify for a company like Microsoft where a portion of their investors don't even want them involved with gaming. It's not their primary focus and it never will be, not the way it is for Sony. They want to monetize gaming, certainly, which is probably where they're going with Windows 10, but they're operating from a different perspective than the other hardware manufacturers. Microsoft would drop Xbox tomorrow if they could take some of the PC pie away from Steam.

The end result might mean that Sony and Nintendo have a less determined opponent in the console space, assuming Microsoft is turning their guns on Valve. On the other hand, as I've said elsewhere, this might mean that Microsoft simply starts buying up more exclusives rather than developing their own. It might just be a shift in the way they fight as much as anything else.

Good developers to improve/expand their studios.

Marketshare. Not many Xbox One owners are happy with recent events. Talk of making the Xbox up-gradable, losing exclusives to PC and the potential merging of PC and Xbox UI and OS have not been taken kindly.

I said it already, but Gaming is moving towards being a service rather than being attached to a unique hardware.

Sony is doing PS now, but it's really not perfect, Microsoft is destroying the generation gap and rapproching PC, mobile and console gaming (with consoles being a living room device)
Nintendo will be the last one to do the move. But their going to start with the Virtual Console.

Hopefully they make a similar move (besides the closing of studios)

We should be given a choice between physical, digital, and streaming. Quicker we get there the better