XSX vs PS5

[Nintex]

I get the sense that despite MS sticking with Xbox in the long run the damage has already been done as far as this generation is concerned.

Microsoft started to release games on PS5/Switch and announced the next generation. If they don't want a repeat of this generation and they're not doing a mid-gen refresh I can see them move Xbox Series X games to next gen to have a stronger line-up in 2026.

However Sony is also not in a position to agressively push Xbox out of the market in the US like they were during the PS4/Xbone days and they don't seem to want to considering the overall poor outlook for the industry this year. 

One of Microsoft biggest mistakes that barely gets mentioned was to prioritize expanding the XCloud infrastructure instead of producing more Xbox Series X consoles before Sony got their own supply issues fixed. They probably worried more about Stadia and Amazon beating them in cloud gaming space than they did about PlayStation selling more consoles. If Xbox Series X had sold double the numbers it has now, third parties likely wouldn't have skipped it as much.