Not really surprising, couple the poor console sales with the fact I think they view gaming going to a more streaming based service I would be surprised if we see more than maybe 1 more physical xbox generation and everything going cloud based in the next generation or so for Xbox.
The only way this works for Microsoft is to make it so that their content reaches the biggest audience that it can.
The other plus for us as PS5 owners is that it may potentially mean Fallout, Elder scrolls etc won't be locked behind Microsoft devices (though with the next releases they may be timed releases).