I think in principle it's against the grain of their current vision.
They are trying to reach wider audiences with less hardware, not confine audiences with more hardware.
Just going off a limb here, but wouldn't the obvious approach to this be confining focus to a singular device and pushing that singular device to more players in more markets? Because that's basically what Sony are doing with PS5.
MS's approach doesn't necessarily mean
less hardware; in reality it means they're more hardware-
agnostic. There's a difference.
As their cloud gaming matures and expands into new markets, every developer making games for Xbox has a potential reach of 2 billion users.
TBH that is more of a theoretical potential but in reality they will not reach even half of that. No subscription service requiring money will, just like no hardware that has to be purchased would.
Youtube, yes
Youtube, has a total active user base of roughly...2 billion people. And that's a service the vast majority use for free at no charge (in fact of that only 20 million pay for Youtube Premium). What makes anyone think a service like Netflix, let alone one like GamePass (or ones even further behind like PS Now) are going to reach 2 billion or even half of that number ever? They simply won't.
So the term "reach" in this context just means more in terms of total number of people with compatible devices that can provide an access point to the content. It's an admirable statistic but the reality is that is not a realistic number for mix of GP subs/hardware sales/software sales for MS or any platform holder.
I think people forget that software is important. Xbox could come out with a VR set, and make a few AA games and call it a day. Wouldn't you feel ripped off? Then once these consoles are replaced you no longer have the ability to play new software with that headset.
No one is going to be convinced to buy an Xbox and leave PC. MS would loose more money leaving Steam then that extra 30% would bring them.
Perhaps, but this is more about
Xbox players who might feel tempted to leave for
PC due to things like VR support, along with cheaper prices of 1P games on Steam (at least when using Steam Keys, tho those are limited time and use).
That's potentially one less user for a 3P publisher to sell their game to in the Xbox ecosystem, which means one less software unit Microsoft Xbox division doesn't get a 30% revenue cut on.