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The FAQ doesn't answer this concern, they only mention the limited cloud storage space (~2GB displayed for my personal account). From what I've gathered, local save backups aren't a concept on Xbox One (presumably due to cheating concerns); Microsoft only has a support page for exporting the console system settings. According to a makeuseof.com article (updated in September 2020) copying save files locally isn't currently possible.

I'll leave the Xbox ecosystem at least for a year (until the Series S/X availibility stabilizes) and I fear that the game save cloud storage may be cleared for accounts considered as "inactive".

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  • I didn't find a tag for save files. Xbox cloud storage falls under the Xbox Live umbrella I suppose.
    – user598527
    Commented Jan 8, 2021 at 10:26
  • "local save backups aren't a concept on Xbox One" — presumably affects the Series consoles as well.
    – user598527
    Commented Jan 8, 2021 at 10:27

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Yes they can.

As with all cloud services, they could just delete your data unilaterally by terminating your account as stated in their terms of service. However, if you operate within the terms of service, you should be fine.

Inactivity is not a concern. I have found no reason to believe that inactivity would result in a suspension or deletion of any data permanently. Note that caches might be deleted and your initial queries might take longer.

Your Xbox One holds a local save that is synchronized to the cloud. This functions much the same way that OneDrive/SharePoint work.

Finally, keep in mind that there is no such thing as an Xbox ecosystem. It is all a Live ecosystem which is also tied into your Windows PC (if you opted for it). You could keep your account "active" by just using the Xbox application on your PC or phone if that is your only concern.

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