WTF, man.
MS failing is GOOD FOR GAMING.
The S is taking up the space, and consumer buy in of what should otherwise be a single sku at parity (or close to) with PS5. Meaning, the probability of MS having lower than projected lifetime sales for Series would have been high with a single, higher-spec sku offering that costs more (just the Series X option on the market). I don't think the difference install base wise would have been significant but 4-5million less lifetime sales I could have foreseen as being the result of a single, higher-spec sku. As it stands, the Series consoles together (S/X) are bound to reach at best 45 million lifetime sales when all is said and done. Probably low 40 or high 30s (million of units sold) is what my head tells me. In a hypothetical scenario where the Series X was the only Series on the market, unable to tap with the same degree of success as the S into the price sensitive buyer, you're looking at 35 million lifetime or so about at best. Thus, MS having a 75% - 25% split is not good for gaming if the result is greater lifetime buy in from casuals, and price sensitive consumers. That's a win for Microsoft in the short term.
Long term it's a loss for a completely different set of reasons (hence "another fail"). Brand effects. Long term comparative dilution of parity and perception of such vis a vis the direct competition and "indirect" competitors, lower margins from less than well off consumers, and overall the poor consumer conditioning for cheapness, a complete opposite of a premium product. McDonalds.
Industry wise not only is the Series S the baseline console for a significant number of third-party pubs and devs, specially those that cross-port with PS5 but it's also a digital only device, further moving toward the all-digital future; a market where the platform owner is king and dicks you around (and that goes for "dear" Sony as well). You don't need physical, online-only DRM with an all-digital box - all-digital is the DRM. When cornering a price sensitive consumer with a digital-only box, a disruptive model such as a subsidized sub service (Gamepass) is even more palatable to said captive audience, and thus create dependency for gaming access to such service....entrenching itself as a consumption habit for said consumer (millions of gamers). In other words, it's also bad for gaming that it lessens the relevance of physical media, and all its pro's, beyond just the option to escape the prison cell that is all-digital. That is on top of anchoring, and capping the generation's potential to weak hardware across the board.
A short term "success" for MS, a long term brand fail for MS, and a fail for the industry overall. Not every MS perceived L is a moment of cheer, specially when it has industry wide consequences. Just cause Sony may theoretically benefit from it long term is not a W. If there is something I've learned by watching the Sony-MS competition over the years is that Sony is horrible at landing a killing blow, specially when at almost every opportunity presented to do so the direction from the top is to copy the third place actor in certain policies to squeeze a few more bucks out of the captive PS base (cause it's worse over there at Xbox).....in doing so also losing comparative advantages which provides a lifeline to MS, on top of the lifeline the MS warchest provides. It's bad when both platform holders decide to copy each others shitty policies, usually Sony copying MS's shit but not always.... recent being the $70 retail standard - in this case MS copying Sony. When the rule of two gets shitty, the only escape for consumers is Nintendo or PC... known non-starters for millions of gamers. Thus the result = sucking it up and taking it up the ass.
The whole Xbox enterprise has been a Fail for a long time now, beyond this generation, and all it does is get the industry engaging in shittier monetization practices but also in disruptive, and value destructive modes and models of operation (in plural). Beyond more destructive milking, higher gamer polarization as well. Since MS refuses to kill Xbox, it's an incurable cancer. Thus, the worst the cancer gets, the worst the state of the host (industry). It will only stop when the cancer stops giving a shit for the industry and move to some other host to bother and infect, not cause of superficial "failures" amounting slowly to a breaking point ..... which MS has shown again and again to compensate with their money if need be. At this point predicting that some failure will be THE catalyst or the one too many which finally breaks the camels back amounts to "even a broken block is right twice a day".
That's the nuanced, long answer. The simple answer from me will be offensive to you, so I'll reserve it, for the sake of relative peace.
