Forza Horizon 5 is the highest rated racing game of all time on Opencritic. Sony has no open world racing game at all so it loses by default in this space.
Forza (any Forza game) is either blatantly arcade (Horizon) or toxic online experience (Motorsport).
Gran Turismo although has its own issues is miles ahead over anything Xbox has to offer.
Horizon is as racing games as GTA Online for that matter
They don't really need it. There's 3rd party options like Need for Speed.
There's lots of first party titles MS has no one to one answer for either. They don't have a big mascot 3rd person shooter platform game like Ratchet and Clank Rift Apart.