People who say it's only 4 games are missing the point. It's probably only the beginning, because if the goal was actually selling small games like Pentiment, it wouldn't move the needle at all financially so it wouldn't make sense.
What will definitely help them financially is selling AAA games like Starfield and Indiana Jones... It just makes too much sense for them when hardware sales are so low and gamepass subscriptions have stalled.
The problem is how the Xbox hardware survives on the long run inside that new strategy. It wasn't already selling that well worldwide and now they're competing with a console which will get basically every game (or most games) outside of Nintendo games, unlike their own platform. I'm pretty sure they know their new strategy will further hurt their hardware sales on the long run and probably ultimately kill their console, but it's clearly offset by the sales they could make on PS5 and Switch.
I just don't see how it ends up in anything else than going full multiplatform for MS. Then what's the selling point of Xbox hartdware ? Game Pass, but it has already stalled. Playing every MS game day 1, but is it enough to keep a meaningful hardware market share ? Probably not.
And if you go beyond that, that endgame doesn't make much sense strategically for MS. Unless I miss something, they don't care about being a standard 3rd party video game publisher, margins are too low and it doesn't really fit their Office 365 / Azure high margin core business. It would probably end up in a full blown sale.
All this looks like the start of an exit strategy to me. As an exit strategy, it makes much more sense because at least you recoup some of your losses and you boost the publishers sale price by going full multiplatform. I always said I thought Game Pass would fail and MS would exit gaming business. I still think that's where we're headed here.
Unless they actually think that strategy can convince people to move to the Xbox ecosystem and to Game Pass, which seems highly unlikely.