Microsoft have brought this on themselves. The one place where they still commanded some consumer loyalty was in gaming, but they've squandered it to the point that Valve may provide a consumer OS that's more appealing than Windows.
Make no mistake: as I've said since the launch of the Steam Deck, it's a direct attack on Microsoft's home PC market. Worse, Valve basically pirated Microsoft's APIs so the software could run on Linux (yeah, it was legal because you can't patent software no matter how much unique work you put into it, but it was still unethical). But in Valve's defense, Microsoft has done nothing to avoid this inevitable next step. When you see a competitor stealing your code and taking your customers, maybe you should react. Do something, anything, to show your customers you are still leading and innovating in the space and care about them. Leverage your strengths for the other things only you can provide (like application software or music or movies), keep pushing the envelope, add new API's to help with graphical and AI features faster than Valve can steal them, SOMETHING. Instead, MS cancelled their music service and has largely abandoned everything else entertainment-related that would pair with interests of gamers (I do still buy movies from the Microsoft Store when I can't find them on a streaming service). They have the strength in AI, but provided NOTHING for game developers. (e.g., imagine if in Starfield, instead of the static ~50-100 repeating bases if AI generated new ones dynamically so there were no repeats, saving the hand-crafted content for the actual storyline quests, or if secondary NPCs could be more interactive thanks to LLM AI).
So, I don't want to root for Valve on this, because they're success is based largely on quasi-legal piracy as far as I'm concerned, but they may win over even me if Microsoft continues to piss on its userbase and fans.