I'll be going PS5, and I have more interest in Nintendo as a compliment to that, so i'm not your target market. But I could guess.
Most people who own a PC aren't going to get an Xbox, Now maybe it's better for Microsoft to release on PC, even on Steam, and get the extra sales, and exclusive soley-Xbox content doesn't pan out as being as lucrative. Fine, keep that stuff coming to PC and make your money on the side. But here's my pitch, (some of which they are already doing anyway).
There is a convenience battle brewing between Switch, Apple and maybe Stadia - it may end up taking some of the low end out of the traditional console market, and that's a hard battle, I say instead go after the high-end medium and even the low-end PC people with a vengeance - that's a much easier battle. While some people use gaming laptops, there is a serious lack of 'appliance' in that sector.
The battle for the living room TV is mostly played out and Xbox does well here conceptually (albeit it's behind the PS4 and maybe even the Switch now). The Living room PC is incredibly niche and not really going anywhere, PC's strength is still monitor/desktop.
Lot of kids play their consoles on a monitor or small tv, maybe a desktop, in their bedroom these days - so I say... be a little bit more like a PC (as an option). In terms of storage and online play and OS - of course consoles have already made strides here. And clearly with super fast SSD's and much faster CPUs promised, we are going to eliminate what in my opinion is the biggest current bottle neck with consoles - not GPU power, but load times and frame-rates.
So lets try going for something that's a little bit more PC, something that maybe would cover the bases of maybe not all, but a percentage of PC gamers -
(these are not things I would personally have traditionally petitioned for a console to do, I like the appliance nature of it, but I'm answering the question about what could MS do)
- 1st class Keyboard and Mouse support - already kind of happening with certain current gen titles, separate matchmaking pools and cross-play
- The ability to have edge browser on there and use it with keyboard and mouse.
- Hell, allow booting to Windows...cut down edition. Potentially run office or some basic apps.
- Do what you can do to get League of Legends and World of Warcraft on there (or similar low-end, but popular PC titles).
- Do what you can to get strategy games on there - a small genre, but why not if the specs are there and keyboard and mouse support is a given.
- More streaming tools for influencers - if the average joe can get a streaming setup going that looks 80% as professional as people on PC with fancy expensive setups on second computers, it'll be used heavily.
- 120hz (HDMI 2.1) options for certain fast paced titles
I think all that is do-able mostly, and of course there are things like emulation and modding that will never belong on console, but these other things would chip away at the list of advantages, while of course having none of PC's disadvantages in interface, setup, maintenance.
So yeah, make your console, still a console, but take over some of those PC advantages in your appliance. Make building a desktop seem too much of a stretch/effort - because it already is for anyone who is older/married/kids. I might consider an appliance I can play strategy games, or fast paced high framerate FPS mouse/keyboard games on. If it's just another console, I'll stick with PS5 or whatever.
Nostaligia alert - I remember the 360 launching with Kameo and Gotham Racing making my own and my friends medium/high spec PC's look like cumbersome white elephants. Let's see this happen again, because last gen was too safe and it didn't really achieve this outside of exclusive first party titles.