Too many variables to say whether it would be a good move or not. There is certainly a possibility that MS could make more money than ever if they ditched their hardware business and started offering all their services and software on PlayStation and Nintendo as well. It would be easier to say if we knew what percentage of their contents and services revenue is coming from non-xbox platforms. The potential for growth by offering subscriptions and software on PlayStation and Nintendo consoles is massive, which is why they also expanded beyond their own platforms to Steam. Sony aren't going to turn down gamepass (at-least a 1st party only version) if MS is no longer a competitor.
MS are currently in a better position to move on from Xbox hardware than they ever have been before and software and services seems to be taking a much higher priority for them then their console platform but that doesn't mean it will happen. Their content and services is currently extremely healthy while their hardware last quarter took a big hit.
Interestingly if the Activision deal had been accepted by the CMA and it was pushed through then MS would likely have sold more 1st party software on PlayStation than Xbox this year.
Essay Pro