To add onto the Timdog stuff.
Xbox hardware is not doing great. Series X was available for $350, and Series S was available for $150 not that long ago. And PS5 at $500 outsold it like 2:1.
Gamepass has failed to meet growth expectations for a few years at this point.
Some of their biggest games were relatively disappointing. Starfield and Halo Infinite did not sell what it was expected to.
They had to sign away a lot of rights to the biggest games that Activision has, in order for that acquisition to go through.
Xbox is still growing.
But they've spent an incredible $80 billion over the years. Instead of getting the growth that they've wanted, they've solidified themselves into the biggest third party publisher in the world, with a huge arm into mobile, PC, consoles.
It doesn't feel surprising that they'd shift strategy that way, but the timing still feels surprising.