Microsoft has shown that they want to transition Xbox to a service. Them abandoning producing their own hardware in favor of PCs and streaming isn't that much of a reach. If you don't have to sell a specific piece of hardware to a customer to get them to purchase your game your potential audience can grow even larger. It's not them abandoning anything it's them trying to widen their audience. Console hardware is far less profitable than the software. There's a reason you're seeing Microsoft exclusive titles on Nintendo hardware and a streaming service at a minimal cost that includes all their high profile titles day 1 as well as all their games being released on PC.
They've been laying the groundwork to detach people from the idea of only being able to play their titles on a single dedicated box for many years now. xCloud is only the next step in that direction.
Sony on the other hand more depends on the legacy business. The only way they completely move in that direction is as a response. They've done some things to have a foundation in case they need to pivot that way but I don't think they're as committed to it as Microsoft.
Part of that is Xbox is just a pet project to Microsoft. Sony as a company depends on PlayStation.
Apple sells iPhones because their profits come from the cloud, accessories and warranties. Hardware sales drives peripheral sales, you’re ignoring complementary markets. Companies arent leaving money on the table.
Breh nothing M$ does is a pet project. Xbox is and has always been intended as a serious competitor in gaming. I agree they intend pivot to a streaming service, but again They are not leaving consoles anytime soon. they tried this gen to replace physical media and failed. Physical isn’t going anywhere. As for Sony and legacy I got no clue what you’re talking about. Patents have shown they are looking are portable development, next gen VR, and new storage systems. Sony has been anything but responsive this gen or the next.
This is just another segment M$ and Sony are trying capture. This isn’t streaming vs physical, this is now a battle of ecosystems.
You game on your phone, you game on your pc, you game on your console. That’s what M$ and Sony are competing on.