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I think everyone would be happy if MS and Sony could just work out a deal to put Gamepass on PlayStation. MS can keeps the games exclusive to their ecosystem and PS doesn't have to risk losing players to XB because MS controls a bunch of the most popular IPs.

MS clearly doesn't care about hardware sales, they just want players. In this scenario, they get those. Sony would get to sell consoles to any former or new potential XB players that don't care about owning the games cuz they have no reason to buy an XB. Also, it seems likely that MS will eventually transition everything to the subscription model, at which point literally every console gamer would opt for PS.