I feel starfield was the straw that broke camels back. They clearly expected starfield to perform far better than it did, although personally I feel it's stupid to place so much hope on any game. Starfield, for all its fault, performed well commercially. The main issue is with expectations and ms seems to be falling in line with square when it comes to that.
That, and as you mentioned the extreme discount and how it didn't move as much units as it should, clearly changed things within ms. The market decline this year just served as fuel to fire along with the buyout of Activision.
Also makes me wonder if there was some data that Activision had that caused ms to change course so quickly b
Starfield and Redfall before it were clearly tests by MS to see if taking big AAA games exclusive was gonna drive adoption of their consoles. That didn't materialize for multiple reasons though (Redfall was clearly rushed out and unfinished, Starfield was more complete but had scope and design issues imo).
I think the bigger reason is people just don't want to buy into the Xbox brand anymore. The brand has not really built a core identity in the market that can build the fanbase up over time.
Like in the early 360 days the identity became clear: Strong 3rd party exclusives (basically the Playstation playbook) and a specific focus on high-octane shooters coupled with a strong encompassing service. That was something they could build on, but they just completely pivoted to chasing Nintendo's casuals-oriented success before cementing their newfound identity.
You look at a lot of the early Xbox One launch slate and a lot of it was just some guy ticking boxes for each big genre.
Meanwhile Sony refocused on high-quality storytelling in AAA 3rd person singleplayer games of all kinds. And the rest is known.
