If they get enough subscribers it definitely can make money. From what I've read that number is around 50 million. As far as a decrease in production value and microtransactions all of that is very possible. Only time will tell what's going to happen. I think it's the MP games that will suffer the most if anything. Something similar to what we've seen from Halo Infinite.
The good thing is as MS gets more devs under their umbrella they can keep the games on GP forever and not have to remove them. Similar to what Netflix does. Netflix stuff never leaves the service but everything else does. I rarely play games twice so I do enjoy the service but yea some games I'll need to just outright buy because I will go back to them eventually.