This will be the end of gaming as we know it. It reminds me a lot of physical movies vs. Netflix/streaming or physical music (CDs/vinyl) vs. Spotify.
People love GamePass and I hear regular people talk about it in passing. Now combine GamePass + XCloud and now you don't even need a console? You just play it from your TV or phone? As long as Microsoft finds a way to sell a controller to the masses (or just pack them with new TVs), it will change gaming. The average consumer will just stream their games like they do their movies and music. They don't care about having the best quality or having a beefy console or computer render the graphics they are seeing. All they know is they are playing a game.
Like the physical media guys, us hardware fans will become niche and gaming PCs will probably be the only way left to play games in a traditional sense. Consoles will just be streaming boxes like Amazon Fire Sticks for TVs that don't have the app. The future is grim but thankfully more and more people are getting into PC gaming and it might be our savior.