Damaging the Xbox console. The Xbox/MS brand has never been stronger in the PC space especially considering how they cratered their image in the GFWL shitshow era. The real question is how long the classic console model will survive, mobile will eat into it more as time goes on, and the march to all digital will continue. Sony is in strong position and so can afford to move slowly while MS have been forced by their weak console brand to just pull the band-aid off.
That has come at the cost of the console sales, which is the strongest pillar they have. Everything collapses without it.
People keep dreaming of a future where GamePass exists just on other platforms, but it won't.
The classic console model probably has at least another 2 cycles in it. Mobile hasn't at all eroded console sales. And physical or digital has no impact on console either.
Pulling off the bandaid too early can be a mistake and that's what we've seen.
They won't be the first company to be ahead of the industry but too early for consumers. PS3 and Vita were both way ahead of the industry. So was the EyeToy.
MoviePass was ahead of its time but failed, but look at AMC A-List. Sometimes it takes a stronger position in an industry to make a model work.
MoviePass was trying to leverage a weak position into a stronger one, which is why it failed. It had to be aggressive in order to do so, which is also why it failed so fast. Microsoft has money, but that's about it.