Correct me if I'm wrong but weren't M&As like ABK the reason Xbox found itself in such a bad state that they "had" to start going fully multiplatform? I don't think more M&As are going to work, at least of major 3P devs and pubs, considering almost all of them seem to enjoy their independence and given all the rampant layoffs over the years due to M&As, can't blame 'em.
Now OTOH, if this means what I first thought of when reading, that MS are going to pull an Apple and start designing their own silicon, now that's a different story. I mean, Nvidia are already doing that right? Architectures like RISCV are free to utilize, proven, and you can make your extensions proprietary if you wish. You get ARM-like thermals and battery life with at least as good of performance if not better, depending on how you engineer your silicon implementing the ISA.
Companies like MS would still be beholden to TSMC for fabbing, but they could have more control over the silicon design process itself and that directly benefits costs. It'd be a return to what companies like Sony did during PS1 & PS2 days; if you design good enough silicon you can probably get away with cheaper nodes and spin up your own fabs easier or have more options for fabbing besides just TSMC & maybe Samsung.
Also this part...