Like I said, it's not up to them.
The very instant that gamers believe all Xbox games will be available on Playstation, Xbox console sales will cease permanently.
Simple value calculation:
"I can buy a Playstation and get Playstation and Xbox games, or I can buy an Xbox and get Xbox games."
I don't disagree from a value standpoint, or how gamers perceive value (one console versus another) based on game exclusivity.
What I'm simply stating, is that Microsoft will manufacture another console for the next-generation regardless of the poor outlook of doing so. They'll either find success carving out more space for cheaper all-digital alternatives (i.e., hybrid, cloud, streaming, mobile, etc.), or become the biggest third-party game publisher on all platforms.
What you describe sounds like Sony providing the premium all complete console experience and MS the cheaper lower end.
I believe Microsoft is shopping around far more than Sony for better SOC/APU pricing (potentially, ARM or Intel components) and other cheaper BoM components on reducing overall console manufacturing cost, but still have capable and performant hardware to match (or stay relatively close) to whatever Sony/AMD may provide. Microsoft (it's OS/APIs/Tools) has far more flexibility to change hardware vendors without the negative impact of having to start from scratch with backwards compatibility, Windows based OS, XB UI and features.