you are making this sound way harder than it is.
I'm saying the 2017 xbox will be a separate thing from the xbox one, not just an incremental upgrade, but a new console entirely.
The difference here is that MS will continue to develop exclusives that will release on the xbox one for while, so people who buy the cheaper option instead of the new console can still feel they are getting their moneys worth.
Slowly, this will begin a cycle where a new hardware refresh is every 3 or so years, but the games are supported on the previous console release for a while.
Its not a foreign concept, its like owning a graphics card, slowly and surely, you wont be able to keep playing the newest releases until one day you cant play them at all and need to upgrade.
Or like another ecosystem you might be familier with, iOS. A lot of apps simply wont run on older Iphones, and isn't a big part of this UWA inititive to mimmick just that style of ecosystem?
I'm sure the average consumer will be fine understanding it.
Ok then, so it's a new console/new gen. Which brings me back to my other point, why are they starting a new gen when powerwise it's most likely only going to be competing with current gen consoles?
In 2017 it'll be competing with the NEO power wise, not the PS5, which is a bad move. When MS is starting next gen, they have to be competing with the next gen Playstation. Not the PS4.
Assuming 3 year gaps
2016 - PS Neo (more powerful than PS4)
2017 - Xbox Two (slightly more powerful than PS Neo) (Next gen starts here)
2019 - PS5 (Neo 2) - More powerful than XB2
2020 - Xbox 2.5 - Slightly more powerful than PS5
How is this a good decision for MS? They're constantly playing catch up to "last" generation this way while Sony gets big hardware advantages each iteration for a year. Then in 2020 xbox still has to cater to people with just an xbox two released in 2017 meaning their games will have to be held back to support Xbox two. Sony on the other hand have just had 6 years of PS4/Neo and can fully switch over to PS5 without worrying about the PS4 and won't be held back.
Only way around that would be for MS to have whole new generations every 3 years while Sony has them every 6, but that in itself is another terrible move and is only gonna piss customers off. And 3 years is hardly a generational leap if the NEO is anything to go by (2x instead of ~10x)
It makes no sense to release a new xbox in 2017 (2016 is another matter alltogether but 2017 messes everything up), just wait till 2018, make it powerful so that it's gonna compete with PS5 in 2019, then roll on from there. 2017 is a mistake no matter whether it's a .5 or a whole new gen in my opinion.