Mergers always lead to layoffs, games aren't doing great as they're not essential in an iffy economy.
Microsoft is seeing the writing on the wall and cutting internal studios. It's much cheaper to just pay 3rd parties to release on Gamepass vs having to fund an entire games development.
I don't think we even see a real "Xbox" in the future. You'll have Xbox branded living room PCs with Windows. They're working on a gaming mode that I guess optimizes Win 11 a bit.
Getting a AAA games job will be much more difficult in the future.
They are struggling to make the case for buying games from the Windows Store instead of Steam and they are struggling to make the case to buy an Xbox Console instead of a Sony or Nintendo Console.
If we see Xbox branded PCs in the living room- that's more a sign of pivoting due to failure than anything else.
Even when D3D12 came out there was commentary how very close it was to Vulkan, which was supposedly largely the work of DICE engineers working for AMD to create the preliminary Mantle implementation.