This CEO sounds worse than the last. With a declining brand, making games exclusive is only going to make the brand tank harder.
Their next system needs to be free, or nearly free (~$100), but with a required subscription. Game pass needs to switch to a model that has a lowest tier at $10 or $15 per month that allows 3 games per month (from the whole catalog, you pick the game and it uses 1 credit, resets at end of every month) up to a premium tier at $35 per month that has unlimited play. Free console with 3 year subscription to the premium tier.
Console specs should be 4k at 60 Hz. $900 without subscription. Announce this the day after Sony announces the PS6. Sony would be screwed, especially because they are already releasing most of their games to all consoles simultaneously (per the most recent summer games fest).
In 3 years, raise the price of the lowest tier to $20 with 5 credits per month. Offer a 6 month discount on a 1 year contract for any accounts which have completed their 3 year subscription.
You summed it up pretty well. Consoles are basically dead at this point. Sony is hurting too.
Both companies badly mismanaged this last generation and there's a significant sentiment that the value of the consoles wasn't justified. Why would consumers want to buy another one?
Sony should have done the subscription model in the last generation. They would have buried Xbox.
Xbox has a chance now if they become a competitor to the steam machine, but the price will have to be much better than that system. If it isn't free, then it will need to offer steam as a marketplace.
The only way either system could survive any other way is if they went handheld like steam deck or switch, but that might be even harder.