Honestly… they don’t. I think Microsoft will eventually go to a PC pre-built with a OS on it. “But isn’t that a Console?” I mean I had an alpha, On my alpha I had a versions of windows that immediately booted into the Alpha program for ease of use. I stopped the alpha program and my wife uses it as a work computer (a weak one so she can pull up documents).
I don’t see a future where Microsoft makes a different OS than Windows, makes a hardware setup that isn’t off the shelve parts. MAYBE a specialized motherboard with a chip set. But ultimately, I think IF they make a “Console” it’s going to be a Windows machine with set specs that don’t change, and an OS that is just for gaming, maybe with some way to dockerize the software so you always get the same experience every time you run it.
Sony and Nintendo will keep making Consoles, for sure, but Microsoft has no benefit in making a console. And before someone says what I described is a console, Xbox can’t play PC games, what I’m describing is a windows machine playing windows software. When you make Xbox software currently you make software that ONLY can run on an Xbox… but why? You already are making a Windows build so you can ship a Windows version, so why not only make the windows version and have your console just be a windows machine in an OS that will giver players a consistent experience.