Right, but instead of owning only half of AB + Xbox as businesses, they now own both of them, and this now somehow means those businesses are less capable going forward?
PS5 folks are still going to be subsidising the dev costs for the next Xbox by buying COD and every other formerly "exclusive" title, which is another way of looking at things.
The Xbox's existence isn't just about selling consoles for money - it's a critical mass dev and deployment platform, which keeps the price of gaming PCs, and the necessary capabilities gamedevs demand from hardware anchored to a level that's affordable. One's current metric is spend several thousand on a PC, or several hundred on an Xbox, and get the same games and the same stores, but without having to deal with Windows. I actually suspect a big motivator for bringing alternate game stores to Xbox is to eat the low end gaming pc market, rather than retreat from consoles.
It's the same way that Surface provides a reference quality / performance / price for Windows tablets.
Folks need to stop wetting themselves over the "pace of new consoles". 4 years, 8 years, 7 years are the previous generational update cycles, so a Series X successor isn't due to market for another 3-4 years at least.
You do not need to spend several thousand on a gaming PC that's a false assumption, and the gaming PC market is always a lot bigger than people think. Look at Apple and its gaming ambitions with its M class chips, now consider the fact those chips are in every single Mac sold, and have been for a while now. Now whilst those are expensive, PV's do not need to cost several thousand to run a game as I said.
But the mobile market is the biggest games market by far, we have seen several times now someone launch a 'free' mobile game and turnover billions in revenue from its in app purchasing and ads, these are of course the most popular ones but it does happen.
It is a mixed bag on when next gen consoles will launch, it is said Xbox will launch before PlayStation maybe in 2026. Things highly possible as the Xbox Series sales are flat and dropping, they've lost 47% in sales in Europe. That's huge. And their are now rumours devs are considering weather or not to support the platform, look at the WiiU to see what happens when no one buys your console.
Xbox hardware is there, it is capable and has features, Game Pass is good, but it is clear it isn't a console sales driver in all regions and the Xbox idea of having your games on everything is impacting sales, and some of the game quality is lacking too, Starfield seems a marmite title, and it isn't as popular as they thought it would be I don't think.
Phil has also stated how he would like all gaming platforms to be in Xbox console, so PS games and it's store and Steam too, mans living in fantasy land to believe that will ever happen with console sales flatlining, your comment in the games platforms in console misses that key fact.
IMO Microsoft are going to try and subsidise their console market, and its games whilst trying to pay for profits and growth in the mobile sector, they wanted King really in that deal, they bought a fast access to the biggest games market on the planet. But weather the Xbox console survives or not? No idea, I don't think so, I guess if the best gen one does rely on the cloud for processing power as stated in the leaked AB case docs then it points towards where Xbox is heading.