I remember rumors years ago about Sony getting Evolution to make an open world racing game to respond to Forza Horizon. Now they don't even need to do that because Microsoft will just do it for them.
The red line has been crossed now and with rumors swirling of Halo next, it's looking like it's over for 'Xbox' as we know it. People are waking up to the fact that PS5 is an Xbox now and so there's little point buying a Series console. This is reflected in the sales numbers this year.
But it's not only over as a devices brand - what follows from the collapse of console sales is a potential implosion of Game Pass too. 5 out of 6 Game Pass subscribers play via console. If console sales dry up, GP will not grow. If Xbox, as a device, bleeds users, then GP will likely even shrink. Microsoft are already missing their pie in the sky 2030 subscriber target by a long shot.
I believe that unless Sony allow a form of Game Pass onto PS5, similarly to EA Play or Ubislop+, it will not survive the next generation. Xbox will be massively downscaled to just being the biggest third party company - and yet, with COD and the massive PC, Switch and PlayStation user base combined to sell to, I bet they still make a shitload of money, just differently.