There are a lot of reasons that this makes sense for them. But also, given the other things they’ve been promising, I think this is going to be an expensive piece of hardware that basically just hides Windows under the hood.
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Does the Xbox even have any use case these days? PC mini?
If it is a PC like many of us expect, then its use case is that they want to outdo the SteamOS experience and also provide compatibility with games that rely on kernel-level anti cheat.
Perhaps for people who want gamepass but don’t want to deal with PC gaming. But I can’t really think of anyone I’d recommend buying an Xbox to currently. Really the last place platform this generation, by a lot.