I don't think this is the last generation of Xbox hardware but they definitely are not going to push the next iteration hard. I suspect they will start to license out the OS and have a broad set of hardware specs to follow. Treat it like the Surface, it will co-exist with other machines.

Essentially, the business model of the 3DO has finally been proven correct 30 years later. Do keep in mind a lot of the 3DO team did end up at Microsoft... maybe they played the long game...