Microsoft is winning a war Sony doesn't know they're in. They've all but destroyed the concept of exclusivity. Everything is a computer now. Games are multiplatform by default. Turns out - more sales means more money. Why wouldn't Sekiro be on PC, or Halo be on PS5? Just so people can feel special about which brand they bought?
The Xbox has always been an agenda more than a platform.
Yeah, Xboxen have been outsold by Playstations at every step, but in so doing they've dragged Playstation hardware into lockstep with their machines. The literally-a-PC Xbox-the-first tricked Sony into bundling the PS3 with a then-expensive hard drive, and Sony barely got the memo in time to give it a video card. PS3 ports still sucked for years while the 360 had CryTek running 1:1 devkit demos. And then, yes, the PS3 came from behind on system and game sales, but not in any way that vindicated the ways it was weird versus the ways the 360 was weird. Microsoft choosing PowerPC was unthinkable... but they proved it didn't matter. And then - the PS4 and Xbone were basically the same. Only dumb software and worse camera optics gave the PS4 a leg-up that it never lost. Both machines got about the same upgrades at about the same time. They even looked about the same. Do you want your console in bold, or italic?
And now - the practical difference between Microsoft's glorified AMD laptop and Sony's glorified AMD laptop is negligible. It only affects which color boxes you buy. Fanboys have been crying "Playstation has no games!" since the PS3 era, and what they mean is, "all the Xbox kids can also play these games, waah."
Sony loves that attitude. Sony wanted 1996 to last forever - back when games came out for a machine. The games the PS1 didn't get, didn't matter, because Sony could show off whatever the N64 and Saturn didn't get. (Which, for the PS1 and PS2, was admittedly quite a lot of whatever.) They were still doing it for MGS4 and Uncharted and so on. They're still kinda doing it for God Of War. (No, the other one.) But around the time the PS2 was printing money, this little game called "Grand Theft Auto 3" released a basically identical port on PC. And then their machine got basically identical ports of Quake- and Unreal-engine games. And by the time EA purchased and strangled RenderWare, the whole damn industry had seen the mountain of cash waiting for anyone who built the same game once for two audiences.
Nintendo, of all companies, caught onto this. Their rebranded Android tablet flies off shelves because existing games just kinda work. Slowly. (But I would be zero percent surprised if big-boy GPUs adopted hardware ASTC.)
Sony finally got their head around it with Helldivers 2. As with Microsoft publishing on PS5, Sony's sudden PSN demands don't make sense, unless you look further out. Helldivers showed Sony how much money they could make if they were just a PC publisher - and it scared the shit out of them. They need a platform, to stay relevant. Nintendo has world-class design and mythically popular characters. Microsoft-- is fucking Microsoft. Sony's not even having a great time as a music and movie company. If they have to be a games company, instead of owning a whole-ass platform, it's a fundamental loss of power. So getting dead serious about their ecosystem, to the point of pissing off millions of existing customers, is an effort to maintain that grip.
Microsoft treating them as just another machine, instead of a lockstep rival, seems like a strong countermove. They're not losing money on Xbox, or games, or subscriptions. But they're willing to burn through entire studios in pursuit of much larger goals. They don't want to win a fair fight. Competition is for the little fish. So at this point, they might end the console war, by simply not participating.
Or maybe they're just idiots. I mean, it's Microsoft. They've fumbled bags larger than this one.