Microsoft just shot themselves in the foot.
I don't know how much the rest of you know about Western culture (I'm an expert), but money and ruthlessness are huge parts of it. It's not like it is in Japan where you can become successful by being honourable. If you try to be honourable to someone over in America, you will get laughed at, and the only way to get rid of that shame is by winning in sales.
What this means is the american public, after hearing about this, is not going to want to purchase any Xbox console, nor will they purchase any of Microsoft's games. This is HUGE. You can laugh all you want, but Microsoft has alienated an entire market with this move.
Microsoft, publicly apologize and cancel 3rd party Xbox consoles or you can kiss your business goodbye.