In fact, if you would have subscribed to the $15 Xbox All Access anyway, you actually save money by paying monthly: $19 in the case of the Series X, and an impressive $59 in the case of the Series S.
That last discount is the tell as to what Microsoft is up to: the truth is that anyone buying a “cheaper” console that, unlike the PS5, is in fact worse in performance, is pretty unlikely to sign up for an additional $15/month gaming service. Subscribers, though, are exactly what Microsoft wants, and when you consider the fact you can pay only $25 a month, get all of those free games, and “save” $60, the offer becomes pretty compelling to more casual game players, and parents.
More broadly, Microsoft is seeking to get out of the traditional console business, with its loss-leading hardware and fight over exclusives, and into the services business broadly; that’s why Xbox Game Pass, the cloud streaming service that is available not only on Xbox and PC but also on Android phones (Apple has blocked it from iOS for business model reasons), is included. In Microsoft’s view of the world the Xbox is just a specialized device for accessing their game service, which, if they play their cards right, you will stay subscribed to for years to come.
This also explains the hardware differences: Microsoft actually wants developers to focus on scalable games that work anywhere, as opposed to targeting one specific hardware configuration; their strategy is just as aligned as Sony’s, it’s just pointing in a very different direction.
This is the best take on Microsoft’s gaming strategy I’ve read.