MS definitely want to sell you a console, and then sell you games on that console. However, MS has found that gamepass is a way to make money off of gamers that were never going to enter the Xbox ecosystem otherwise (Gamepass PC / Series S gampass Second console), in other words they’ve grown a new market where they are not yet directly competing with Sony and Nintendo.
In the medium term, gamepass represents a huge chunk of potential recurring revenue with a very high profit margin, which is why the rest of MS is throwing its weight behind it.
If i was sony, what i’d really worry about is that Xbox has been very effective at using gamepass to increase its mind share with consumers. It is only a matter of time before that mind share is converted to market share.