I'm going to have to disagree. Microsoft still needs a traditional console or else Sony will have all the leverage. Even as a third party publisher / developer that is bad.What would stop Sony from charging 50% fee instead of the 30% fee for each video game sold from Microsoft? Xbox consoles keep Sony in check from doing anything crazy.

However, I do think Microsoft will allow users to buy a windows license or enable "windows mode" on Xbox with a game pass subscription.

The only reason the Series S sold well was because it was the only current-gen option available that wasn't out of stock. Microsoft's decision to prioritize the Series S was out of necessity, as they couldn't manufacture enough Series X units to meet demand

Once the supply shortage of PS5 ended, Series S sales dropped off quickly. This isn't to say that offering both high-end and budget models is a bad strategy, but being a "budget version" is clearly not a strong selling point, as both the Switch Lite and Series S are currently demonstrating. People who can afford new gaming released, can easily afford extra hardware cost

The real barrier to gaming today isn't the 100-150 USD price difference in hardware, but the high cost of software. With most popular games requiring paid online services, the hard truth is that if someone can't afford modern gaming, it's usually because new game releases are simply too expensive not because of lack of budgeted hardware. It's no surprise that only 15% of the Steam user base has played games released in 2024

I feel to respond in more detail here but I think the main point is that you're over thinking it. A cheaper entry point device will continue to be pushed when available which is something I think people are missing in estimating the price of the next Xbox 

Sony will have to worry about PC and Nintendo stealing their players or outgrowing them. Lines between handhelds, home consoles, and PC's are more blurred than ever. "Indirect" competitors are not so indirect anymore.

Xbox's exit won't make things easy for Sony. PS6 may not be close to PS5 in popularity even without Xbox keeping them in check. Sony's immediate threat is PC, they just don't know it yet.

^This. Sony needs to learn to push console sales and focus on good single-player exclusives that are around 20-40 hours long. No more PC ports. No more GaaS. Everything runs at 60 FPS because graphical fidelity is too expensive and 60 FPS should be standard. Exclusive games that people can actually finish and don't wind up being 800 million dollar boondoggles. 

I think most of us are expecting this. An expensive enthusiast machine.

So far, there hasn't been any serious consequences from the "mistakes" you mention though. Have the Gaas and PC ports really hurt them? Did people stop buying Playstations like people did with Xbox's ? PlayStation 5 may look like a failure compared to PS4 but PS4 was a less ambitious in its design and engineered with immediate profit in mind. It was always going to be hard to compete with PS4 sales.  

GaaS has definitely hurt them. Between buying Bungie and cancelled GaaS products they've burned 6 billion with no profits outside of Destiny money. PC ports will hurt them next gen. PC ports are a "good for business in the short term, but awful for business in the long term" type of strategy. 

The PS3 vs 360 era was the only time when PlayStation and Sony overall was suffering. Every other console has been a success. GaaS failures and PC ports don't necessarily seriously interfere with the success of a console. You could argue that they could have invested those few billion into better games and kept 100% exclusivity they might have sold a million more consoles, but is that one million console loss going to prove to be fatal for their business? No. This is what I don't understand why people keep harping on about small failures. Has it sold well enough to convince Sony to produce a PS6 ? Absolutely, and that's all that matters. Has XBSS/X sold well enough to do the same? No. 

Are you kidding? Your typical AAA single player game costs 300 million to make. Between Concord and buying Bungie alone that would be 4.4 billion. That's enough to fund 14 more games at the level of Spiderman 2. Imagine the PS5 with a minimum of four 9/10 rated exclusives a year. They would have sold at least 10 million more consoles from the exclusives alone and at least couple million from no PC ports. PS5 might even be looking at 100 million by now if they had just focused on good exclusive games.