The market for new people getting consoles is not really that meaningful (save for kids who grow into it). There aren't 100M new people that want a game console, no matter how good a value GP is. And even if there was a big market to be had there, those users would still spend much less than existing core gamers.
MS needs to go after Sony's userbase. That's where the money is for many more years.
So what? Game Pass subscribers are already spending much less. But I overtime/long term, casual gamers will likely move away from consoles as a whole.
Then Ybarra was right. They are going to need some serious AAA firepower to convince PS gamers to miss out on Spider-Man, GoW, Horizon etc.
They could go nuclear and buy more studios and publishers, Take-Two is a good one that has good games and has lots of IP :-) Nothing will surprise me at this point if the industry consolidates and companies are wanting to compete to bolster their subscription service.