anyways, there are people who want everything to be given to them easily. The market is everyone.
It's not just Shifty, nor eastmen, nor rntongo, nor Johnny, nor me, etc.
They can create a traditional console for people who prefer it, but the point is that (only) locked hardware won't make the cut anymore. That way they can abandon the half-assed effort that is PC gamepass and take the PC seriously, 'cos the services are very good regarding full integration with the consoles, it's just the execution in Windows that fails so miserably.
Microsoft has the OS and the tools to make it easier for them or anyone else to create a set of hardware standards.
It influences the same thing that Google did with its Nexus from the beginning of Android. It is the guide from which the rest of the manufacturers are inspired, and the path that the software company makes the hardware companies follow. In the end, Android doesn't do what Samsumg, Xiaomi, LG, want, they do what Google dictates, and for that they have always used a base hardware that is the path that the rest of the manufacturers to use. And all the other companies' attempts to get out of there have failed, and they have tried (Samsung's Tizen itself).
This way Microsoft can avoid ramifications like the Steam Deck, which is a Linux PC, and Microsoft doesn't like that at all.
Also in this way it sets standards in the hardware that they will then use for their software products in the way that best suits them at all times. They can drive improvements in hardware at a given time, new types of devices or functionalities, etc.
And about the rest, Microsoft is a Third Party, just because it releases a less powerful console does not mean that it has to put all its games there. From now on it will not be the issue of being tied to a generation of consoles. The games will be made based on potential users who will have machines to run them.
It's another concept. They're not selling you a generation. They will be selling you a console hybrid with which you can play some things and not others in the future. The same as the PC, the same as mobile phones. As time goes by there will be games that stop working... well if you want to play it you update the machine or play via streaming...
The potential market, is the world... the niche is that of current consoles.
This business model also allows you to not have to depend on generational changes, they will not care about that. People will update when they feel like it. They are third party, the only thing they want is to promote that ecosystem, and in the process kill the locked consoles.