Sony is also encountering similar issues in terms of the cost of games being unsustainable and Moore’s Law kicking in. The difference is that they’re making games that move consoles and Microsoft just aren’t.
At this point, I don’t know what strategy Microsoft has at this point. If you say “Xbox everywhere”, what does Xbox even mean any more for the enthusiast? I don’t think Xbox is done, but if they were looking to be HBO before, they are now going for the Netflix approach - high quantity content, mediocre product - and possibly alienate the existing audience they have.
I say this as an Xbox Series S owner, I’m happy with my purchase, but as a consumer I don’t think I’ll be upgrading my console to anything Microsoft ship any time soon.