Arrogance during the Xbox 360 era is what led them to their current situation with the Xbox One. Did they not remember what happened to Sony in regards to their arrogant and haughty behavior during the start of the PS3 era? Did they think people were just going to accept their policies without complaint?

Regardless of the innards, if they didn't adamantly and blatantly promote their plans to nickel-and-dime their loyal fanbase they would have been in a virtual tie with the PS4 at this point.

I agree with this really. But they built a lot of good will with consumers and the media between 2001 and 2008.   Xbox and MS were in heaven back in 2007/2008

It's just that after 2009 they started to shoot their own foot.

First Xbox One was a 2014 console not a 2013 console so the 1st mistake was to get afraid of the competition and do a poor launch.
Next mistake was the focus, Don Mattrick wanted to sell the console as entertainment machine and he was not right. Xbox One is a gamers machine first and entertainment console second. This is the way Phil is doing so I think Xbox is on right track.
Third was lack of power or proper SDK at launch, it would have been great if Ms invested a little bit more in GPU and use a 1.5 or 1.6tflops GPU and a bit more ram 12GB ram DDR3. Even now I am happy with specs but you know more power is not bad.

In short Don Mattrick was after the casuals and he failed big time because his strategy was not proper. Phil is catering to both parties casual and hardcore with a greater focus on games.

In my opinion, MS's biggest mistake began in 2010, after the Kinect launched. They became too complacent with the 360 and left a sour taste on the 360 userbase. That sour taste became bitter when they announced the X1. Like Sony at the beginning of the PS3 lifecycle, MS thought that they were too big to fail and it backfired big time.

MS has shot themselves in the foot more severely than Sony did at the beginning of the PS3 era. While MS won't lose as much money on the X1 as Sony did with the PS3, MS lost a lot of mindshare among the gaming community. Their bad reputation continues to hinder them to this day and this is something that cannot be easily reversed.

I kind of understand that. For me, the unveil was absolutely horrifying, but i was already displeased with Microsoft due to the way they stopped making first party games and just focused on Halo/Forza/Fable/Gears. The kinect sapping resources didnt help aswell.

I just feel bad for the current Xbox leader because he now has to manage this disaster and the one responsible ran at the first sign of water like it wasnt his fault.

Xbox one biggest mistake is being made by Microsoft - company that gave us "dark ages of personal computing" in 90's. Company with almost unlimited resources, which responded to iPod with the Zune. Whatever they touch changes into big smelly turd :)

Now that I think of it, even PS4 comes with Play Room which is a free app using all of the great features of the PS4 camera without it even being bundled. And Play Room made people want to buy a camera.

X1 pretty much did it backwards^^

Much like the PS Vita, the name "XBox One" is really unappealing to me, MS should of proceeded to call it the XBox 720 with an approach to gaming. The continued focus on the Kinect (casual) audience prior to the XOne launch upto the backpedaling gave it a terrible start so far. The hardware of the One really is the problem though as this aspect is the only thing MS can control in terms of factors to limit their competitor (Sony) who has closed the gap of online functionality considerably.

I love how everyone assumed they would have the most powerful console cheaper than PS4 simply because MS haez more moneyz. People just don't seem to realize that companies don't like throwing away money no matter how much they have lol. Also the pervasive rumors beforehand were that PS4 would miss 2013 and Xbox wouldn't and would give them a lead. I remember several threads scientifically showing why this would happen. Then Sony announced holiday 2013 in February and they all suddenly went silent

3 of the greatest X1 mistake at lauch!

1º) They made a USA centric console. The "console screams" if you live in the United States (and UK) you will get 100% of the product, if you live in another country, sorry, you'll have a lot that will not work right ... but forget it, continue buying a product that was made specifically thinking in USA (and UK) / S

2º) Value, the balance of the money you use and what you get... The kinectic itself is not the problem, the problem is the price! why the hell would I pay more for a console that is basically the same as the Ps4 (not to mention that the X-1 has lower graphs in multi-platform). Some may argue that the X-1 was most exclusive, but how many of these were true "console-sellers"? Titan fall? that you could also play on the PC and xbox 360? Ryse, dead rising, Forza? Do any of these actually justifies the higher value of the X-1 that apparently is bound to have a weaker version of almost all multiplatform?!? ... and before you say that this difference in multiplat. games is negligible, I ask you to look the past and see the kind of reaction that the "best multiplatform coming to X360" created, minor things like loading, texture or 2-4 fps were already sufficient to choose the version of the X360 instead of the version on Ps3 ... nothing has changed, the console that has better multiplatform still out with advantage in this fight. Microsoft could have won this problem with truly good exclusives, to justify the higher price, but unfortunately, for them, these exclusives were not good enough ...

3º)Damage on the image of the product ... I think it is not necessary to comment here ... Gamers are the ones who get consoles at launch, Gamers, most often, are informed and know what they are buying ... with all the confusion that X1 generated with DRM, always online, always Kinectic included, less powerfull than Ps4, etc. all this makes it understandable that the X1 is losing in sales.