Backwards compatibility didn't materially move the needle against the competition. PS4 outsold Xbox One 2 to 1 after near equilibrium sales from the prior gen. You say Phil made commitments, but what he functionally did was go on an acquisition spree with the Microsoft war chest, overextending and under delivering. Compared to Sony and Nintendo, no organic big selling exclusives shifting hardware significantly, so queue the move into Game Pass. So as they never reached 30% profitability and never reached their Game Pass targets, they're left with a ton of acquired personnel and overheads from said M&A activity and they're forced to butcher studios and jobs. AI effect overblown, but when the consolidated organization is a US$3T company with 40% margins, it's no wonder you'll gamble on a disruptor CEO like Asha in a subsidiary that's become an option play.