If the sales are so good, why don't MS and Playground confirm? If they want to be seen as the "biggest publisher", then the biggest publisher shouldn't be scared of reporting their software sales to shareholders. It's not like with hardware where we know the reason they stopped reporting that (i.e bad sales).
Also where are the corroborative sources? Can Circana add if this is accurate? Can we get some Famitsu sales figures for the game on PS5 (I'm sure those actually exist, you'd just have to comb a lot of charts)? UK? Spain? GFK maybe? This shouldn't be that hard.
The largest third-party publishers are still nothing, literally nothing, in comparison to where the Xbox platform was at (even as the third-place platform) by revenue, market influence, etc. You fail down from being a platform holder to a publisher, not the other way around.
Maybe during the 360 days, this was true? The past 5 years? If we're talking about genuine mindshare and not manufactured astroturfing and channel-flooding to pump the brand name in news cycles 24/7, I'd say several 3P have absolutely outclassed the Xbox hardware platform in terms of market influence and net profits. Epic Games (Fortnite), Roblox, Take-Two (GTA Online, GTA5, GTA6, RDR2), From Software (Elden Ring, spawning a whole genre of Soulsborne imitators in general) etc. have had much more real & substantive influence on the market than the Xbox brand.
Now I take it your argument was about how MS going 3P publisher is a step down from them being a platform holder, and that's somewhat true. That's always the case for a while when talking about companies which used to be platform holders and then transition to not being platform holders. I don't think that prevents MS from being successful as a 3P publisher, though. It will require a hell of a lot more effort than they are currently putting in, though. Their problem ATM is they're pushing quantity over quality. Quantity might help boost the revenue forecasts, but what impact are the games actually having?
Let's look at Obsidian as an example. They're a workhorse, yes, but I'd argue they would do better with fewer, yet more polished & refined releases. Avowed kind of had a brief moment and then was quickly forgotten by the majority. The Outer Worlds 2 got completely overshadowed and some people probably don't even realize the game was released! There's a rumor saying they've got four titles in development ATM, and that'd be great for them if they didn't have a habit of releasing a bunch of games that either get ignored or get forgotten shortly after launch, mainly because they are "just good", but not enough to stand out in their genre or market.
I think that gets harder and harder to justify funding when you've got a more prominent Obsidian in Bethesda right next door. If you're getting pinchy on funding, would you rather split $100 million between 4x Obsidian games that might do something (or not) & a new Fallout, or would you rather cut the Obsidian funding to $20 million so Bethesda can put that extra $30 million towards a game guaranteed to do some big numbers and generate large returns?