Everyone has been forced to move away from physical events for the foreseeable future, as conventions are canceled and the public is encouraged to abstain from sizable gatherings. There's not really any sort of hope on the horizon, as we're still not exactly sure what kind of timeline we're working with. However, E3 2020 has been canceled outright, and publishers and platform-holders all seem keen to just host pre-recorded streams of what they would've shown at a press conference.
That's Microsoft's plan for this E3, but it's apparently already the plan for next E3 too. In an email to Microsoft's MVPs about the scheduling of next year's MVP Summit, Microsoft reveals that it "has made the decision to transition all external and internal events to a digital-first experience through July 2021." (The Microsoft MVP program is a group of "Most Valuable Professionals" -- people who aren't Microsoft employees, but are recognized as community ambassadors who share valuable technical expertise about specific Microsoft products.)
Unless something changes, this means Xbox is preemptively no-showing E3 2021 (if E3 2021 even happens, that is). The big splashy press conference will presumably be replaced by a pre-recorded presentation, a la the monthly Inside Xbox show. Similarly, the annual Xbox Showcase in the Microsoft Theater adjacent to E3 won't take place. Microsoft is keeping its employees grounded for 15 months minimum, and that puts the kibosh on a physical presence at any convention.
Realistically, this might just be the future for Xbox at E3. Every company that has broken away from E3 (and Microsoft already had to a certain extent) hasn't seemed compelled to come back. They all get by fine by hosting their own events which are almost definitely more cost-effective than actually being at E3. There's no denying that E3 was dying a slow death, but COVID-19 restrictions might've helped accelerate the timeline.