Okay, so this is basically (and assuming there is anywhere near an "actual" return to older Xbox business strategy i.e OG, 360 etc.) what I think MS could actually end up doing, and I talked about it a long time back.
-They might shift back to a traditional-lite model for Xbox hardware and subsidize Magnus
-They will probably have OEMs manufacture devices, but more in the capacity of Sony using, say, Asus, to manufacture some of the PS5 units in America
-They will find a way to integrate the Microsoft Store and Copilot into the next Xbox's OS and UI
-Through the Microsoft Store, people can download and run Windows applications on the next Xbox as they are basically "whitelisted" by being in the store
-Alternative storefronts like Steam and GOG will likely still be accessible on the next Xbox BUT...
-...they will require having a Game Pass subscription. This is how they shift away putting games Day 1 in Game Pass but still retain value to the service
-You can either buy the subsidized SKU for console-like pricing but with a locked-in 2/3-year Game Pass subscription, or buy the non-subsidized model at a much higher price to basically access other storefronts like on a PC from Day 1
-For legal reasons, and to not step on toes of OEM PC devices, Microsoft will probably keep "PC-style" functionality locked down to accessing what's available on the Microsoft Store and tying alternative storefront access to Game Pass locked-in subscriptions (or offering a non-subsidized model at much higher price i.e $1200 - $1500). Device upgradability limited to expanding the SSD capacity; no upgrading the RAM or GPU like in actual PC devices.
-They will probably still find a way to get rid of paid online and convert offerings for that at the cheapest tier into something else
-They will probably still lend OEMs the right to use Magnus APUs (or a variant of them removing whatever hardware enables Xbox console BC) in non-subsidized Xbox devices running some version of Windows with the FSE on it, and allowing things like upgrading the RAM capacity and overclocking the APU, and having more PC-like expansion options (PCIe ports, for example). But these will probably cost even more than the unsubsidized Magnus Microsoft provides (which will probably be low-volume anyway if they want to get people through the subsidized + 2-year (or however-long) Game Pass version)
-They'll probably cut/reimburse current Game Pass subscribers who got in years earlier at super-cheap prices and stacked up their subs 'till 2030 (maybe they've already started doing this?)
Most of that I was speculating back when rumors of new Xbox hardware started circulating, but as other leaks came out (especially the Gestridens stuff), I shifted away from it as most of the concept is still framed in a traditional console business model, which it seemed MS were shifting away from. If they genuinely are shifting back towards it (and not just BS'ing with empty words), then this is how I think they'd do it as it still gives them some unique points of differentiation against PlayStation and Nintendo.
And, naturally, it'd also mean them scaling back ports to PlayStation in particular; I don't see games like COD or Sea of Thieves ever going away, or things like TES Online for that matter. But stuff like Gears, DOOM, Indiana Jones etc? Yeah, I could see those going away. And maybe they do push timed exclusive content in games like COD & TES Online to prioritize Xbox; can also see them scaling back releases on Steam to just the "big" games, with other games coming later similar to what SIE's been doing with PC in general for years now.
Even so, I give the odds of
ANY of this happening at best 5 - 10%. It's such a longshot of ever being a thing that it's almost laughable to suggest it occurring. But in the extremely rare case it
DOES....well, that could make things very interesting for Sony in particular in how they adjust (or if they adjust, if they can).