The biggest issue with Microsoft's startegy to deal with the console market not growing... seems to be that the console market isn't growing. Console gamers have been trained to see success a certain way within the market and Microsoft, Sony, Nintendo, and every console once leveraged this and weaponizing gamers against each other with walled gardens. Then there's also just social perception and marketing. Xbox factually has more third party game support than ever and including heaps of former third party Playstation exclusives and even more games that just historically skipped Xbox. Objectively this is Xbox's strongest generation in terms of well games.
What's also interesting is how people just conveniently forget Sony owns Bungie with Destiny 2 remaining multiplatform and new releases promised to be multiplatform. And how MLB the Sony is completely Sony first party developed and published and hasn't just been multiplatform, but has been day one Xbox Game Pass until this year. Yeah Sony was forced to do that to keep the license, but still, times are changing but the vocal internet seems to still think it's the mid 2000s. Not an insult or anything but an observation.
I'll at least say Xbox has a clear strategy. Arguably a clearer one with more resources at their disposal than ever. Playstation's is umm... huh. Nintendo's just seems to be to buckle down and stick to their niche. The focus is on Xbox because, well I mean this website isn't called Sony central, but the future of consoles on the whole are far more risky than the Xbox brand specifically. The market is stuck and the companies in control aren't doing that much for whatever reason. Meanwhile gamers are growing at exponential rates on cloud, mobile, and PC, and technology in the former two is also growing incredibly fast. I really wouldn't be surprised if future flagship smartphones play a lot more AAA games and even if they make a lot of technical compromises or are a generation old that'd be huge.
Going back to original point, Microsoft is terrible at marketing but this strategy, that's Huge departure of what they and other console markers trained customers on, partially requires changing public perception or pulling in blood. Xbox is doing neither.