You’re thinking too deeply on this man. They’re already losing the hardware race to Sony really bad. They don’t care if they lose that though. They are simply trying something different than past few generations.The market didn’t even want a PlayStation handheld the last time one released. Phil Spencer has flat out stated they’ve lost the hardware race and that their games aren’t appealing enough. What makes them think they can put out a successful handheld lol. They don’t have the same clout as Valve with the Steam Deck and even then that seems to be a more specialty item that’s not even sold at typical retail.
Microsoft is a software company first and foremost and that’s where it looks like they are shifting full attention when it comes to gaming.