With the news that Xbox will stop advertising in Europe and possibly giving up completely on the territory, the end of Xbox hardware could certainly be in sight.
Xbox custom hardware is probably not happening ever again.
At best, we're looking at standard PC component configurations to which Microsoft says "this is xbox" and releases some custom launcher and pre-configured settings in games for it. And that's fine by me, honestly.
But a much harder question is whether there will even be Xbox brand or even any games studio under Microsoft by the time we get to the next generation.
How much longer can Phil Spencer and Matt Booty spread their incompetence at running all these studios into the ground, before Microsoft's stock holders just tell them to fuck off and sell/close everything?
We know Xbox's executives (Phil Spencer, Matt Booty and Sarah Bond) aren't running the Xbox show anymore. Anything they say and promise in public gets discredited in a matter of weeks or months. Matt Booty was publicly congratulating Tango weeks before they were closed. Sarah Bonf said 2 months ago that CoD would be available day-1 to all Gamepass subscribers and now they're tiered.
The natural conclusion is they have no agency over nothing at this point, other than PR appearances. So we can't trust a single word coming their mouths. They could be promising on their mothers' life that no studio will be closed this year and tomorrow they would be closing another 5 studios.
Does this mean that Sony are free to completely control when a generation begins and ends?
No console maker ever controlled that unilaterally. What determines when they start developing the next console is when sales for the current console start going down.