Phil is the top.
The higher ups at MS won't be deciding which project XBOX should axe and this type of things. They will most likely give guidelines and objectives of which Spencer will fulfill as he see fit.
Heh, no.
XBox isn't a separate division within MS. This means a lot: it's part of a bigger division which has a bigger view/goal-set.Within this division (It's part of Windows & Devices) it's just a small part and sadly for xbox, it is part of the Devices segment where other devices are part of too, which are a little bit more vital for MS' survival.
It also doesn't operate with an infinite budget, but a budget that comes from its parent, and the cancellation of this large project shows to me there are issues with keeping within that budget: investing more money to complete the project would mean the total amount of money invested in the project would become too large for them to hit their estimated revenue from this project. With a situation where there's no problem with their own budget, they would likely have taken the hit and released it because the cancellation for a high profile exclusive is bad for sales of the console and consumer perception of the brand (e.g. 'what to expect in the future? is it safe to invest my money in this console or will there be no good exclusives coming out?')
If 'scorpio' (or whatever they'll call it) won't deliver what they've promised and won't win over the customers they've lost to sony, it's game over for xbox, I'm pretty sure of it: MS doesn't need it for their survival, so any $ spend on it has to come back as a profit.