Really sad that the most consumer friendly device is least regarded by consumers.

What do you mean? Which device?

Basically me this whole thread.

There is a reason why they announced it this early and my guess is that they know the Neo is going to launch soon.
Sony will beat them to the punch again and they don't want to look like they are just tagging along and copying what Sony does. I still think Sony will have a Slim out this year and MS announced their Slim console early in anticipation to the PS4 slim for the same reasons as why the announced the Scorpion early.

Now it looks better for them because it looks like they are leading the charge for slims and mid-gen consoles. Announcing the Scorpion might damage Xbox One sales but I think it would of been damaged more if Sony announced the Neo and Slim before them and they waited for a full year to announced the Scorpion.

I disagree with the OP as well.  I don't think Microsoft will exit gaming, but even now we are seeing where you don't need an Xbox to play the games on it.  So, now its up to Microsoft to prove that it wants its console to be seen as something special. Its funny because a lot of gamers have a PC/PS4 setup.  It looks like this will become the defacto standard.  And it might be benificial to Microsoft to cut the costs of hardware manufacturing while doubling up on software sales.  

Exit console gaming? Yes, i think that has pretty much already happened. MS stake in gaming isn't now primarily based on the Xbox console. Its based on windows 10/Xbox live....etc. However i don't see them exiting the game business entirely.

When I look at MS now though, can't help but feel they are a company just trying to hedge their bets, throwing everything at the wall and hoping something sticks. No one can honestly look at Xbox now and say this is what they are going to do or where they are going to be in the next 3yrs. They are constantly in flux. And not in a good way.

I disagree with you on the PS4 slim although now that I think about it... it does make sense.  Also, it wasn't just Sony, that Microsoft was afraid of.  The Nx is still wilding unknown.  Notice that Phil says, 'We believe' that the Xbox One will be the most powerful console when it launches.  I think that this was a premetive move against the Nx.  Think about it:  it the specs of Neo are truly known (they aren't but lets say that it is a 4.2 TFlop machine), then there can be no disbute.  Its the Nx then.  Alos, 4.2 TFlops is not bad for a console either.... especially if its 399.99.  Compare that to a 399.99 Xbox One S and suddenly, we have a situation where PS4 still has a massaive advantage for over a year with NX still unknown. 

It's sad that the only real excitement for the Xbox platform is around new hardware and features. Good new hardware and features, but not much else. Ideally, Forza, Sea of Thieves, and Scalebound ought to be grasping for the same hype levels as God of War, Zelda, or Horizon. Right now, the only game really doing that is Gears. It's hard to imagine them putting anything else together that will get genuine hype.

If the Slim takes off at all, it'll be because it's the cheapest 4K blu-ray player on the block. Not an exciting strategy - but more effective in the holiday season than many might presume.

The Slim and the Scorpio are for different people and they will play the same games.

Yup and if the PS4 NEO launches this year with 4tflops and the Scorpio next year with 5tflops people might just wait for the Scorpio.