I think the proper comparison point here is probably what game consoles have done since the Xbox 360, which is basically run a hypervisor on the metal with the app/game and management planes in separate VMs. That gives the game a bare metal-ish experience and doesn't throw away resources on true multitasking where it isn't really needed. At the same time it still lets the console run a dashboard plus background tasks like downloading and so on.

Hold on a sec, is that the same on PS5? I am pretty sure that wasn't the case two generations ago. Is that the norm now, running on hypervisor ?