Not replying to all of that, way too much. But two things:
1. Yes, MS should still go out and spend whatever on ActivisionBlizzard, because the chance to make a buy like that rarely ever happens.
2. I didn’t say anything about “Sony games” being movie games? Defensive much? Only talking about the nonsense people predicted GamePass games to be. Short, episodic low budget walk n talk games. That doesn’t sound like Sony games to me but hey, you do you.
My apologies if I misread you on the "movie games" part; it's just, that was a phrase I saw coming up online when some people wanted to be derogatory towards Sony's third-person games or dismissive of their titles as walking simulators. And a lot of your post was already about Sony so I just strung the two together. But apologies if that wasn't your intent.
All that said, my own thoughts on content for GamePass were more along the lines of there'd be fewer single player-centric games, and lots of stuff pushed towards a live service, GaaS-orientated model. Unfortunately some of those concerns have manifested with games like Halo Infinite, meanwhile stuff like Starfield isn't necessarily looking as polished as I thought it would given the cash Bethesda have access to now.
I remember some of the early rumors for Perfect Dark were in fact it being episodic, and kind of like a Black Mirror experience. That, I was actually cool with, it sounded plausible and exciting. Now? It's seemingly some type of stealth-based FPS with Crystal Dynamics, who don't have much any FPS experience, working on it, I'd say primarily, because The Initiative don't have a lot of staff. Whether it's episodic or not, knowing what the game likely is shaping up to be, doesn't make me as interested in it.
TBH I didn't have much issue with episodic games being a focal point of 1P content into GamePass provided they fit and made sense. Probably would've helped them have a better flow of content by now if some of their titles were like that, and also would work better budget-wise for the type of funding model something like GamePass supports.
Microsoft has improved dramatically in regards to releasing high quality games. For those unaware, via Open Critic, Microsoft has published 7 games with an average rating of 86.8 while Sony has published 10 games with an average rating of 82.5. This is from launch to date. Thus far, the quality has been there.
We really gotta get off the MC stuff, they aren't the end-all be-all in deciding what's quality. There's not even any consistency for how reviews are conducted, I think some of the tomfoolery earlier this year with some reviews (mainly, Elden Ring, Horizon Forbidden West, and Sifu) showed as such. Some outlets clearly scoring very specific games lower than the trending average while other games in the same IP family they were scoring at or above the trending average, the only deviation being said other games happened to be multiplat.
Then you have to ask how lenient some reviews were for certain games versus others and why some haven't been updated to reflect the actual state of games. All things considered, Halo Infinite did not deserve an 87 MC; solid gunplay alone doesn't cut it for a modern FPS, and with the rampant problems that game has had since launch you'd think a few outlets would've revised their scores to reflect the actual reality the game's shaped up to be. But it's almost like they're sitting on those scores under the impression the game will just magically get better but what if it never does?
On the flip side of that, HFW got dogged pretty hard in some reviews at launch for the state of some of its bugs (tho oddly, Elden Ring wasn't hit in scores for framepacing issues or technical issues on some platforms like PC at launch), but virtually all of those issues have been resolved by now. Why haven't some of the reviewers taken time to go back and reevaluate their scores? In fact, I remember reviewers, or at least one reviewer (maybe it was IGN) did do that for a semi-recent game; given how so many games these days get patches you'd think semi-regular review re-evaluations would be a common practice.
The only problem is that the hardcore Xbox fans are the minority, not the vast majority which are the casuals. Look up Microsoft's showcase from a few weeks ago. It was overwhelmingly positive. 90%+ all A and B grades. For me, it was a C grade (6.0/10) as I got only 5 games out of 25. No new game reveals. All 5 were already previously announced.
Microsoft's direction with Game Pass isn't for the hardcore Xbox fans. It's to get the casuals into the platform and eco-system. I'm what you would consider a hardcore Xbox fan and they're doing nothing for me right now and after Halo Infinite last December, I don't know when im getting my next exclusive. But people I know, work with and talk to who are easily casuals are loving nearly everything that they're doing because overall, they don't care about if the games are exclusive or not.
Sure, we care but the casuals out there who are not on Twitter or forums don't give two shits. They have hundreds of games to choose from in Game Pass, get day one Indies, AA games and some AAA titles here and there at a cheap price. They're more than happy.
As for Series S, it's not for me. No interest in it but for those who want a secondary/complimentary console or if you're a parent with kids, it's a brilliant move. Add in the chip shortages and it becomes an even smarter decision. Series S spec wise isn't going to matter to those who have kids or for those in which it's secondary. They won't even give it a second thought.
Here's my rub: it's not about exclusives even, it's about industry-leading 1P content. Games that are moving some or multiple aspects of game design forward, setting new standards and raising the bar, the way I'd expect at least some releases from a platform holder to regularly do. Microsoft is not successful here, in the past decade they have failed in this aspect IMO (in terms of games built in-house) outside of the Forza Horizon series. Before that, they had a best-in-class, massive IP with leadership quality in Halo but that has basically turned into a dying brand.
I can point to any number of Sony or Nintendo games over the past decade (and longer, obviously) meeting those requirements. I could point to any number of Sega games from the mid-80s up until they stopped making consoles that meet those requirements. I can't point to any Microsoft games that meet them, that they built from start to finish in-house, outside of Halo and Forza Horizon (and arguably Flight Sim but I don't know a lot about the history of that genre on PC. I know there were definitely rival flight sims back in the day however).
I want to see Microsoft's 1P output elevate itself to start hitting those standards more consistently, it's about more than just having some good games every now and again IMO. I acknowledge other things they're doing well but that doesn't have to mean them sacrificing to push where I feel they have a responsibility to as a platform holder in this industry, when it comes to creating leading, standard-setting 1P content. Which means, yes, in some ways they need to cater to the hardcore and core gaming tastes, those are the types who will recognize best what new bars are being set and appreciate them. It's not just about quantity, it's not just about sales.
That's the thing, for me at least. They may release some exclusives, but will they be good? Or, to be precise, way better than PS first-party exclusives, so much so that people are willing to abandon The Last of Us, Uncharted, God of War, Ghost of Tsushima, Spider-Man, etc. and move to Xbox?
I doubt. And until that happens, Xbox won't be able to create that snowball effect that Jim Ryan recently talked about: success begets success. High-quality games = more sales = higher budget for sequels = even higher-quality games = even more sales, so on and so forth.
P.S. Nice to see you here,
@peter42O 
One thing I've started thinking about a lot now, is Sony's games aren't just high-quality because they can get a stable dev pipeline for each one in isolation, it's also because they've spent literal decades building up their internal development studios, culture, and dev tools as well as resource pipelines. Every successive project a team's worked on has built upon lessons and knowledge gained from their previous works, and from those of their peers.
I'm talking little things, too, like how maybe Naughty Dog tried a certain facial animation for conveying a certain emotion in TLOU Part II, that they've had time to reflect on and figured out a better way to attempt something similar in a sequel or their rumored new fantasy IP. Or the way a team may've crafted a certain mission in a previous installment they can then take that experience and build upon into their next project.
That type of stuff is experience gained over years or even decades, and it's not wholly tied to technological advances, either (tho better technology might make future attempts reach their visions more closely). You can actually look at Playground as an example of that long-term experience and growth on MS's side; they didn't get to Forza Horizon 5 in one sequel, but a number of sequels, over a number of years, taking experience from each prequel into the sequel.
And that's kind of why while I'm really interested in seeing what Ninja Theory can do with Hellblade II, people expecting them to suddenly "leap" to the level of a Naughty Dog are just being really foolish IMHO; it took Naughty Dog three Uncharted games, TLOU, and even the Jak & Daxter AND Crash 1-3 to reach where they arrived at with TLOU Part II. Ninja Theory don't have that amount of overall experience, or body of work, to just leapfrog in the span of that magnitude between Hellblade to Hellblade II. It's still going to be a great game, it's just most likely not going to be on the level of a TLOU Remake or TLOU Part II, that's all.
That's a nice excuse for not being able to sell your product. They can't produce a fuck ton of them at will (and certainly they can't sell them) otherwise they would be able to outsell the competition and not be far behind.
Where are you getting that info from that they can use half of a defective Series S APU and use it on the Series S? I doubt that is true.
It's not true; Series X APUs that don't cut the mustard get repurposed for Azure. If MS are producing more S than X units, it's because they're putting in way more S orders than X ones with AMD who in turn are doing the same with TSMC.
There aren't any Series S units with 56 CUs that only have 20 active, and since these consoles are monolithic it's pretty hard to almost impossible to just "chop off" bad CUs in a poor yield. Not only that, I think the Series S's Shader Arrays are set up differently from Series X's; Series X has 4x Dual 7 CUs Shader Arrays, Series S has 4x Dual 3 CU Shader Arrays (I think so anyway, how else could they get 24 CUs and not go over 7 Dual CUs per array?).
Thing is the arrays/Shader Engines share the frontend and the L2$ of the backend, so how could MS even "cut" a bad yield Series X APU's GPU and get it to Series S CU count, if the chips are monolithic? They simply can't do that.
