The problem isn't what they're saying, it's why they're saying it and why they're saying it now.
And the answer to that question is because Starfield has significantly underperformed critically and most early signs are that it is underperforming commercially as well.
#1 A very modest boost in UK sales
#2 Already seeing a serious decline on Steam
#3 It's already fallen drastically on Amazon's best-selling list
I think XSX will have seen a pretty decent boost as a result of Starfield in the US, but not the boost that they were hoping for and they want to change the narrative before it's too late, i.e. when they've lost all mindshare to Spider-Man and a new PS5 revision, and then next year a PS5 Pro, which is going to be the system of choice to play GTA6 on.
But we have to look at the context behind all of this. It was Microsoft who decided to discount the importance of their console by going day 1 on PC for all of their games (a decision probably based on limited console software sales) and a decision that doesn't promote console sales.
Their decision to put all their games on GamePass, which negates B2P sales, particularly on console...
If I wanted to kill a console brand, I'd do exactly what Microsoft has done the last few years, but this isn't a message of maturity and realism, but rather the remarks of regret based on really bad decisions and poor management. They thought consoles weren't important because they were going to become the first major subscription giant in gaming, but that dream has become a nightmare with TV/Movies already showing the downfall of that aspiration.
We'll see what their strategy is next year, but I envision things getting significantly worse for the Xbox brand over the next 18 months, and that is with or without Activision.