Yes it will be up against aerial shooters like Ace Combat. There will be a group of gamers who will find it fun and I see it being used a lot as a virtual world tourism simulator. Once its realized that MSFS gives a satellite mapped photoreal 1:1 Earth then people will be touring Icelandic volcanoes, Nazca lines in Peru, Galapagos Islands, Amazon rainforests, Himalayas etc on huge 4K TVs and such. The landing challenges is something that will keep people hooked and even better if we could make our own and share online (like what GTA5 does where you can design your own races and upload them).
But the best part of a console release is that it will expose even more people to aviation and somewhere amongst all those players will the few who think "I wanna be a pilot" and that can only be a good thing