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Not sure what Microsoft is up to yet, but they are definitely up to something.  They've got too much going on lately: GamePass, xCloud, a new console coming, buying several new game studios, rumors about Switch collaboration, etc....  If there are media outlets talking about GamePass, then you can bet that is all part of Microsoft's plan to get people excited for what's coming.  Microsoft is going to have some sort of big reveal or reveals this year, and most likely at E3.  Hard to say if all of these pieces go to one big project yet or if they have several projects though.

Innovating on the streaming and/or download side is definitely in their wheelhouse too.  They are the largest software company in the world, so this is definitely in their wheelhouse.  I mean, they had the first viable internet gaming service, so it wouldn't surprise me if they are going all in to further develop a streaming and/or download service for games.

Sony may have been first to have PSNow, but Sony always plays things conservatively on the home console side.  This is the smart strategy, because they can usually just copy what their competitors do if one of them comes up with a good idea.  They might lose in the short term, but they are always willing to adapt in the long term.  So they gradually improve PSNow, and that is the smart way to go.  I can definitely see Microsoft trying to put all of their eggs in the download and/or streaming basket though.  What they are doing right now isn't really working for them, so they are going to try to mix it up if they can.

Most likely we'll have to wait until E3 to see what Microsoft is really planning.  Maybe we'll get a big reveal before then, but I think most likely it will be E3.