Same problem on one of my computers this morning, it did updates overnight and I logged in this morning, now all of the Microsoft games give the error code 0x87DD0005 and won't sign me in. The Xbox app will sign me in and works fine. It is only the Microsoft games that are broken.
The above troubleshooting tips do not work. I restarted my PC and did the time/date sync, those didn't fix it.
Then I removed the Xbox app, Xbox Live app, Gaming Services, and uninstalled all the games, then reinstalled every one of those again, and that did not fix it.
I removed all the credentials related to my Microsoft and Xbox sign in from the Credential manager, logged back in wherever needed and that didn't fix it.
I tried to remove the updates that were installed last night but they just keep automatically reinstalling upon a forced restart.
It's broken under all of the MS Games, not just one either. I even tried to install an older version of one of the games (Jigsaw) and it still gives the same error.