2023 will make our break Phil. His investments at some point will have to show fruits of MS's labour.
I don't agree with most of your points, but I do agree that 2023 will be the make of break year for MS.
They started early this gen to build hype and expectations linked to it (if I recall correctly, the first real announcement for the Series X was at the Game Awards 2019), buying Bethesda and other smaller companies (like the one for Psychonauts 2), showing that they will do whatever it takes to come back as a real challenger, and now we're early 2023, and in the general public's eyes (not the fans, not the people who actually know what's going on) the Game Pass is known for having old games or day one games with bad reviews, console sales are going down, they only have 1 true big game this year to set up what this gen will look like (which is Starfield) and if this year isn't the big year for Xbox, it won't get any better after this point. It will be okay, but not great.