“Why not both?” They already have Forza having a ton of DLC you can pay more for. Yeah you get the base game but add ons may not be free. Diablo will eventually be on the service, but the microtransactions won’t be.
They’ll be making Live Service games Live service. It’s obviously the way all developers will go if Microsoft Game Pass becomes the “way to sell games.” And people have been warning about that since the beginning… and it’s been happening.
They practically are in the middle of that. If anything their next console will just be a mini pc. No reason to make a stand alone console if everyone is on PC.
Honestly it’d be lovely if they brought the steambox idea back, but really it’s probably going to be a locked down PC focused on running games. Which is kind of what a console is already.