The problem with #1 is if you can't do #2, you'll eventually fail at #1.
People don't see the financial reports for GamePass, but people have been guaranteeing you all that it isn't sustainable. It's not as bad as say MoviePass, but the idea that this is going to last as is just isn't realistic. Games cost way too much money to develop to put on GamePass, unless Microsoft is paying for the entire life cycle of the game's sales, and if they are, their margins are shot.
Think about it, let's say all game publishers make a collective of 10 billion dollars annual on Xbox in revenue. Microsoft would naturally take 30% of that revenue (less physical sales, but let's ignore that for now). That's 3 billion dollars for Xbox in revenue.
If Microsoft has to pay 7 billion dollars to get the games on GamePass, not only are they not receiving royalties anymore, but all of their revenue needs to come from subs. Obviously there is a bit of a mix, people are still buying games, but making up 7 billion in revenue via subs, isn't easy. And you have to maintain that.
So obviously, Microsoft doesn't put EVERY game on GamePass, but what they're doing by putting significant titles on GamePass is that people are content with their GamePass games and buy FEWER games, which means even the games that aren't on GamePass make less money.
This means publishers aren't going to want to put their games on Xbox (as much) and certainly don't want to put exclusives on Xbox where they could have made their money on PlayStation which has a larger userbase.
What was the big news for GamePass recently? That Persona was coming, games that also came to PS4 (though it looks like Microsoft probably made a deal for them not to come to PS5 right away). Atlus only agreed to this because they know most people have already purchased the games on the PlayStation ecosystem. Ask yourself why Microsoft hasn't gotten a game like CoD, GTA, Final Fantasy, Metal Gear, Silent Hill, Resident Evil, Cyberpunk, Witcher exclusive? The answer is because it costs way too much, you have to cover the loss in sales on PS5 AND the damage to the franchise. If I think Cyberpunk is going to sell 15 million copies on PS5 and the sequel could have sold another 15 million.... I'm going to ask you for at least 20 million copies worth of compensation. That's a 1.4 billion dollar exclusivity deal...
Sony can do exclusivity deals, because the Xbox userbase is small and to Spencer's credit, Sony does want to keep them small, because it keeps these deals affordable and helps you sell units for which you'll make up the costs via continued royalties.
Bottom line is I don't see how you keep a GamePass type subscription going if it focuses on external content and even your internal content takes a hit.
Imagine Starfield in a perfect universe sells 20 million units exclusive to xbox. Let's call that 20 million at 70 dollars. Again, that's 1.4 billion dollars for just one game. Not even including PC sales. Now you look at GamePass subscriptions and those same 20 million people paying 10 dollars a month for a year, that's 2.4 billion... but the question is do they keep gamepass for the whole year or just the month or so they play starfield. Not to mention the lost sales with the rest of the library...
I love Gamepass, but it has this sort of stink of being ephemeral unless and until they start handling their studios better.
Until then I'm gonna enjoy it, but it does seem lately as if built on sand.