MS themselves have mentioned they only created this Gamepass strategy because they couldn't compete at selling games with everyone else. It was in one of their documents about their Activision deal for regulators i think.
If Xbox wasn't a part of a company like Microsoft they'd be out of business for god knows how long. Gamepass can only be a reality because a huge ass company like MS has money to waste like this.
It's also pretty clear MS was expecting Gamepass to have way more subscribers than they do right now after like 5 and half years, specially considering this is available not just on consoles on sale for 200 dollars right now, on every PC, TVs etc...this shouldn't have less than 30M subscribers by now, specially when they sell them at 1 dollar sometimes and you don't even need a specific piece of hardware for it. That's why they keep missing MS's numbers by like 70%.
If somehow they miss their prediction numbers for the 3rd year in a row even with games like a new Forza, Starfield, etc...they'll probably stop being all-in on this.
There's also the fact that gamers mindsets on Xbox is changing and we're not talking about this enough. When was the last time we saw a MS game inside the USA top 10 best sellers for more than its debut month? You actually see Xbox players saying that "since i have game pass i don't see myself buying a single game full price ever again" and they usually also mean 3rd party games since Gamepass already takes up a lot of their time. How is this setting up a good precedent in an industry where production costs are going through the roof as we speak? How will MS be able to produce huge AAA titles through like over 20 studios with Gamepass subscriptions revenue only? I'd actually like to know if multiplatform games not on gamepass are selling less and less on Xbox. I wouldn't be surprised if companies like Square-Enix not even announcing their stuff on Xbox anymore has anything to do with overall full priced games on this platform decreasing since Gamepass seems to be MS focus now. The only thing i see is that Gamepass is great for indies and smaller titles...that's it.
There's a reason you don't see huge AAA developers praising Gamepass...but only smaller indie developers you wouldn't normally play their games if you paid full price.
The problem about MS taking the Xbox business seriously is that the videogame industry is losing its balance now. This acquisition frenzy would never happen before the Bethesda deal and most stuff would still be 3rd party. When the Activision deal goes through, i'm pretty sure Sony will have something up their sleeve as well. Xbox will also buy more stuff and in the end gamers will always lose, no matter how much MS says "this is for the good of everyone" when it reality, it's good for them and their pockets only, lmao. Sony won't lose access to IPs from Capcom and Square-Enix. If they don't outright buy those, they will have more and more weird deals with these companies.
We don't say this enough: The only reason we don't see more acquisitions right now is because the Activision deal is going through issues right now. Once this is settled, acquisitions will keep happening.
The only thing MS did since they acquired Bethesda was destabilize the industry.