i honestly think that the thing holding xbox back is..........
the windows operating system with its legacy garbage. Its like a chic/dude carrying baggage from past dysfunctional relationships. If they get rid of that, make a super sleek windows with fluent design (lots of transparent acrylic affect) and buttery smooth transition animations and low OS footprint (windows core-10x?) microsoft can tell OEMS to make their own Xbox's because OS can be adaptable to the specific form factor. Imagine OEMS like HP, Dell, Asus, Samsung, Lenovo, LG making their own Xbox like console with NVIDIA Gtx 3080ti or RDNA2-3, GDDR6/HBM2 memory, Raytracing and all the other bells and whistles, fast SSD drive without the I/O bottleneck and multiple slots for additional SSD drive. You can literally bring PC master race gaming in video game form factor and OS UI without the bullshit of general purpose use (like photoshop, ms suite, etc).
No more shackles of number of units sold, and still catering to previous gen install base and blah blah blah.
wouldnt that be a dream come true for vfxveteran?
Edit: I think direct x ultimate 12, and other important API upgrades along with Xbox Series X release and D/C of Xbox One and Xbone X might be the stepping stone needed to achieve this.