The problem is that to my understanding consoles have historically been cheaper than PCs because using specialized operating systems and making certain concessions allowed them to cheap out on hardware (not to mention corners cut during the manufacturing process).
If the next console is just a windows 11 pc then there’s no fucking way they’ll be able to sell it on cheaper hardware and we’re already seeing this with the Ally. It’ll cost like a upper-mid range and perform like a mid range with an xbox sticker on the case.
The Ally prices were set by ASUS. The pre-Xbox ZOG Ally pricing was also high. $800 for the ROG Ally X, and especially the $600 ROG Ally with the weak Z1 non-eXtreme. All it is this time around is ASUS's same handheld strategy, but with an Xbox coat of paint, and some new Windows optimizations/Xbox mode that are temporarily exclusive to that handheld IIRC. The new devices are likely relatively low in volume, nowhere near a traditional console launch or Steam Deck's 4-5 million sales. Anything with an "AI Z2 Extreme" in it is sharing supply with $1,000+ laptops that have AMD's Strix Point. I guess you could see it as a sidegrade to the Ryzen AI 9 365: it disables two more CPU cores, but has the full 16 CUs (Radeon 890M).
What are some of the concessions of the Xbox Series X? It uses a large x86 APU instead of x86 CPU + GPU, a lower amount of unified memory instead of the separate RAM + VRAM you see in most gaming PCs, and relatively low power draw, which affects the PSU, cooling system, and case size. I think the official PSU wattage is 315 Watts, but replacements can be as low as 255 Watts. Compare to 400-850 Watt PSUs found in typical gaming PCs (AMD recommends 750W minimum with the 9070 XT).
Based on MLID's Xbox Magnus leak, all of those factors would be the same for the new console. Except that instead of a monolithic APU, we're looking at two main chiplets, with the GPU chiplet shared with other AMD products. This presumably would improve the economies of scale for the console, because nearly 2/3 of the silicon is going to be produced millions of more times for AMD dGPUs.
Nobody is denying that Microsoft will raise the price for their next console (and I expect PS$600 from Sony), but it could be a good deal against gaming PCs at $800-1000, and a good deal against the TCO of Sony PS6 because you're bringing all your PC gaming libraries, and potentially piracy.