MS stated themselves that they were going for a PC resurgence with their software efforts, this was back in the late days of Xbox 360/early Xbox One. Add to that the fact that they have focused heavily on multiplayer and online components from the beginning, a space which famously has a lot fiercer competition. Meanwhile, Sony has stuck with SP games to a larger degree, and managed to have their in-house studios produce some amazing titles, all the while maintaining great relations with 3rd parties as well to get multi-platform games on the regular.
MS' more recent push for cloud gaming and Live Service aspects are also key; I don't think they ever intended to sell more, or even nearly as many, consoles. They want as many as possible paying monthly plans, the very same strategy adopted by most major software and entertainment companies today. Microsoft are, and always have been, a software company first and foremost, it's even embedded in their name for clarity's sake. Xbox sales are hurting for sure, but they're merely leaning on their historical strength as a software giant, by focusing hard on software (kind of a pun - "Gianthard").
I never had much interest in the Xbox brand or their exclusive IPs (most of which are also on PC), but I think their shift in focus is smart in the long run. What I don't appreciate nearly as much, is their spending spree and insistence on buying huge studios and publishers, but that's a somewhat different topic.
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