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All they need to do is to put a fresh new spin on their IPs like they did with Fohza:
-Halo RPG in the vein of Mass Effect (by Obsidian)
-Gears survival horror

And then:
-Conker 2
-Banjo 3
-Scalebound still hapnin
-Sunset Overdrive 2

And then partner with these 3rd party studios for an exclusive:
-Crytek
-Ready at Dawn
-Remedy

$500 million later and Xbox is suddenly very competitve.

You know what else will get all the hardcore people on forums like this and Gaf go crazy? Getting Sega to make Jet Set Radio 3 for the system.