Not a handicap. The S stands for "Saved Xbox". More than 50% of Series sales are S consoles. I don't see MS abandoning the S concept and there's no reason why they won't support 3 SKUs. Btw, Sony supported PS4 for years with PS5 out, so they also have two SKUs to support. This idea that PC devs can support a hundred configs, but MS/Sony can't support 3 is ridiculous.
This dovetails nicely into my next point - I don't think many will care that much about waiting 2 years (though I would prefer 1 year). The fact that the S outsells the X and that 40+ million people haven't even upgraded from Xbox One and PS4 tells me that a mid-gen refresh isn't needed.
Btw, I love that PS users are paying MS for me to get CoD on GP Day 1.
What's hilarious is that Jim Ryan handed the multi-platform thing to MS on a silver platter. He gave MS cover for their multi-platform strategy and pretty soon MS is going to be the biggest publisher on PS hardware and PS gamers are going to be funding GP games for the next decade. Not to mention that MS is now going to be privy to all the next Sony hardware info that 3rd parties are privy to. It's amazing!
Some of you guys think Phil is an idiot, but he used the "CoD has to be on PS" thing to pivot into multi-platform like a champ and now MS is going to open new revenue streams that they only dreamed of before. There is peril in it, but I don't know any Xbox gamers that are abandoning Xbox for PS over it and if they handle it right that should remain so. Powerful new hardware in 2026, announced next summer will satiate the hardcore Xbox fans, especially if Fable, Gears, and Perfect Dark look as good as they do right now.
Another thing they did that was smart at the show was leave some doubt as to what might come to PS. Not announcing exactly what games are coming to PS (Doom likely is) at an Xbox showcase is wise. Much like Sony never commits anything coming to PC until it's about to happen, it's good to keep PS users guessing until MS gets into a rhythm of GP Day 1, PS for 75% of games 1-3 years later. MS will know which games drive Series hardware sales from usage data. They can delay those games coming to PS longer.
For instance, if Fable turns out well and drives Series sales they can soak it to push hardware/GP sales for 3 years and then when people have moved on to the next hit game they can turn around and bring it out on PS for $70. That's the idea. Thank you Jim!