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Given the fact that Xbox is almost a digital only gamepass machine, what benefit does it give retailers to push it instead of PS5 and Switch 2? They will sell a lot more physical games from people buying PS5/Switch 2 over people buying an Xbox, and retailers benefit more from physical game sales over console sales. I think the all digital direction Xbox is speeding towards makes it inevitable that eventually it will be a Steam deck situation where people will have to buy Xbox directly from Microsoft own online stores over having it take up space at retailers.

That is why console producers benefit from having physical copies, because it give retailers more of a vested interest to give retail space to those consoles, while a 95 % or so digital gamepass machine is pretty much useless for retailers.