The minute they cancel Xbox they will permanently lose millions of existing, loyal, long term game pass subscribers, many of who won’t want to use a TV app and cloud streaming, and could go to PS and Switch. They’ve said before they want to exist in as many spaces as possible to maximise the potential number of subscriptions. In the West, consoles are culturally ingrained and way too popular for them to ignore that market, plus as Sony and Nintendo have proved, there is still money to be made directly from console sales.
So the TV app will be something they will definitely want to do, but I believe in addition to everything else rather than shutting any path to subscriptions down. All of the exiting console strategy talk came before the new CEO changed from questioning the need for a Xbox division to fully backing it (mainly due to the potential of game pass) and promoting its importance to the company as a whole (and Phil Spencer to a much more important exec), and also finally freeing up the acquisitions war chest.
