Yeah, that's high on the list of things that harmed the platform.

Hypothetically, if they'd wanted to go a totally different direction, the could have courted game developers willing to create games for them that would have been offerable at a pure-subscription rate. But they chased AAA games and hit a major market issue: there was no way AAA publishers were going to under-cut their per-unit sales in other channels by offering with-subscription access to their product and trusting Google would pay them enough to make that worth their while.