“The most immediate problem is Microsoft effectively killed the Xbox One Slim right out of the gate,” it said in an investor update. “If there were many Xbox 360, Wii U and even PlayStation 4 consumers interested in an Xbox One this holiday season they have now been told to wait until Scorpio arrives in 2017. Microsoft can only hope that the buzz around Project Scorpio goes away soon but with the cat out of the bag that is unlikely.

“There are all kinds of other problems with Microsoft’s mixed messaging. The pricing on the original Xbox One is great, and the Slim is wonderful, but all the important new games will be on PC, so why invest in a console? Just upgrade your PC. And if you do want a console why buy now when Scorpio will be here later. All of this is a net dampener on new hardware sales now and really opens the door wide open for Sony and even Nintendo for the NX.”

“The overall question now seems to be not if Microsoft will exit the game business, but when and how. Of course, that leads to many other questions such as how is exiting the game business handled? Is Xbox spun off? Does Microsoft find a buyer? Or does the company just shut Xbox down? DFC feels the latter option will most likely not occur but it is clear something must be done.

“Unfortunately the value of the Xbox brand is in serious flux with much of its advantage tied to the Microsoft Windows 10 operating system.”

Source: http://www.mcvuk.com/news/read/dfc-microsoft-has-killed-the-xbox-one-slim-right-out-of-the-gate/0168781

They effectively have by 2017, the Scorpio more or less is a small PC box.

Its just a PR issue..... MS has really weird mix messaging.

One Person says one thing, another says something contradictory to the first guy.
Or Day1 person says x,y,z... and then on Day3, the same person says y,b,a instead.

It doesnt mean they ll leaveing gameing.
It just means they need to get their PR together.

*edit:

1st minuet :  "Here is our brand new Xbox One slim!" (dont mention it has a ultra HD blu ray player)

half hour later: "Here are the specs of a newer xbox one, than the Slim, launching in 2017! it ll be soooo much better!" (dont buy our slim)

^ weird way to go about things.

Their view on dedicated gaming is confusing me. Why should I get one if Play Anywhere, Windows 10 compatibility along with Xbox One controller compatibility? I mean, Xbox should really just be an OS that boots alongside Windows 10. Or it could easily function as a streaming box. Overall, I see no need for Xbox to continue to exist in a traditional sense.

I believe that these two won't really compete because Scorpio will be closer to 2 times the price. However, while we know the price of the Slim (and it's not very good since it's basically the price of the current unit), they didn't said anything about Scorpio. It's harder for consumers to weight which unit is better for them when they don't know the price of the high-end model.

If the rumours about a sudden Neo announcement coupled with an immediate Q4 release are true, it will look like a better strategy since people won't hold their buys. It can also make Scorpio backfire because people may chose either a regular PS4 or a Neo because they will at least be able to make a fully informed purchase.

i don't see them exiting the game business,.. maybe the console business. to me they are clearly trying to transition console gamers to win10 PC gamers. i'm quite sure they keep making hardware that hooks into the tv and plays their games too. it might not be soo appropriate to call is a "console" in the future because it might really be more of a simplified streamlined PC,.. that's not necessarily a bad thing.

i dunno. i think MS has a vision here. i don't know if they'll be successful but i think they have a vision,.. window's on your tv and with it all that windows can do (including/especially games).

but i see nothing that says to me "Microsoft will exit the game business"

I don't understand where he is drawing his conclusion from. Microsoft just spent a huge amount of money on new studios. They're going ahead with Scorpio when they could have coasted on the XOS. They clearly want to use videogame to funnel consumers into Windows Store. It also looks like they want to use Xbox to break into the high-end video box sector with 4K streaming.

I don't get where he's coming from.

I used to think MS was going to leave the console market, but now I'm not as sure. What if they make the nextBox into a successful steam machine, so to speak? What if the neXtBox is a PC of sorts that runs Win 10/11? Why wouldn't they make that happen? I really like what they're doing with the cross platform thing between Win10 and Xbox, and it doesn't mean that they'll sell a lot less Xbox's; most people don't want the hassle that comes with building a gaming PC. Consoles sell because people can't be bothered with PC's, and I don't see that changing.

That is the whole problem with the new systems. Why buy the previous versions if you can get the next? There has to be an advantage to the previous system.

Though it is obvious that if this thing doesn't work they will probably stop bothering. I'm ok with that. If Microsoft focus on PC again, then there will be enough room in the market for both Sony and Nintendo to survive aswell.

They where thinking about it early on, but now I don't think so
The slim X-Box will be aiming for differant users than the scorpio