What is to gain from it though? You spent a ton of money to get a stupid product that no one will want and then what? People will just buy a PC or the Steam Machine. Their determination to not benefit the consumer is impressive.
The benefit is simple, it's the same "walled garden" approach that's been done thousands of times prior.
For every user they lock into the "xbox ecosystem" - that person has a large incentive to stay there. Extra controllers will be Xbox controllers, game pass subscriptions, and digital games will all generate a profit for Microsoft and not another company. It's not just Microsoft's strategy, but Apple's, Sony's, Steam's, and Epic's also (and most other companies also). The center of the strategy this time is around digital games and digital libraries.
It's also part of why the Xbox 1 was such a disastrous launch for Microsoft - previously a "game collection" was mainly physical - so you could buy/sell/trade used copies with other people, on internet sites, or through brick and mortar stores (Gamestop, but even Walmart and Best Buy got into it for a while). This console generation was digital, so, as the PS4 established complete dominance (outselling the Xbox 2:1 or possibly even higher to 4:1, based on estimates) - it was putting those users into a walled garden.
Now when the PS5 and XBX launched - it wasn't an even playing ground anymore. A random user was roughly 200% more likely to a PS4 user
and that user likely had a digital library (either raw purchased games, DLC, and/or games gotten from Playstation Plus) that could transfer over to the PS5, but not the XBX. It was a powerful tool that likely swayed many purchases (and will do so again, if Sony isn't completely retarded and makes sure PS4 Digital games work on PS6).
It's also part of why Epic Games is willing to spend so much money trying to poach Steam users - the ones they do will spend money on that platform instead - but they just can't make the economics work.
The Xbox team (and every team) has a set of metrics in front of them that they're desperately trying to tweak.
Cost to Acquire User = x
Average User Spend = y
X is anything they use to get you in - console bundles, pack in games, discounts, etc - any money they "spend" on getting you in. This also includes having the console as a loss leader (if needed), marketing, free games, and so on.
Y is how much profit the average user generates on the platform - they have specific user trends and such but only the average matters.
As long as X > Y - the company is successful, and when X < Y - the company is dying*. The main issue is existing digital libraries feel like a value add to users, but Xbox doesn't care - they want whoever they can get into their walled garden.
PS4 users had ~7 years to build up their libraries and were limited mainly to first-party-approved titles. Steam has been around for ~23 years and the average user has a massively larger library - where in it became a literal meme. There's a 0% chance Xbox will let Steam just run natively on any hardware they put out (unless Steam just buys their gaming division).
* Epic Games can do this because of Fortnite money and they're putting all of their hopes and dreams into walling in a bunch of people first
before extracting value from them - but it won't work.