So, they force bundled Kinect because making it optional would have resulted in less Kinect games, then went on to make about three Kinect games in the first 8 months that it was mandatory?

What kind of a plan and support was that? And of course it didn't help that those games were horrible (especially The Fighter Within).

Kinect, price, physical disc DRM, region locking, mandatory 24-hour checkins (remember, this was actually a backtrack from always online), television.... destroyed their goodwill and credibility.

But even now, when all that is gone, and the price is actually lower than PS4 they are still getting trounced 3:1...
....so all of those mistakes are actually a great excuse for their failures, covering up the fact that PS4 would have beaten them anyway.

Actually I thought bundling Kinect was a sound strategy before it all started. But that was when I expected MS to magically be able to release an 8th gen console with Kinect autobundled and price the same as PS4. I think MS was blind-sided by PS4's $399. They were probably predicting $450 for PS4, and I think Xb one could have lived at a $50 premium, if they hadn;t screwed up on those other fronts. I think they thoughts Sony was sufficiently financially straitened to have to launch PS4 at a break even price, and if SOny had felt the need to do that they would have launched at $450. MS simply misjudged the level of aggressive pricing Sony was willing to go with. Sony got a stroke of luck with GDDR5, and MS had bad luck with their prediction on PS4 pricing. MS's educated guesses on some aspects of PS4 were reasonable, they just pretty much all turned out to be wrong.

I reckon even MS's DRM decisions were based on an assumption that EA, Activision and the like would get Sony on board with the same sort of thing. But either those publishers didn't have the conversation with Sony (because they assumed, stupidly, that Durango would be the market leader and hence set the tone for DRM), or they did have the conversation with Sony and Sony said feck off, or Sony said, "Interesting, we'll think about it. Is MS on board?" When the big publishers said, "Yeah, MS is totally on board", Sony said "OK we'll take it to the board and come back to you." while trying to keep a straight face. Then when the Sony folks were all alone they fist bumped and said "Yessssss! MS is screwed, they're going to announce DRM and we're going to reject it. Put a fork in the 8th gen, it's done!" 

One day I hope some industry insiders spill the beans on what went down with DRM. It seems crazy that MS would go there all by itself, all of it's own accord. They must have sought assurances because MS actually gains almost no direct benefit from DRM.

While I agree PS4 would have sold better even without all the screwups, how can you claim it as a fact? Kinect is gone, price is lower now etc and sales are picking up, I'd say their mistakes are evidently reasons, not excuses, for their failure.

Halo and Forza continue to launch every holiday. Nothing has changed. Microsoft is a company not fully commited to Xbox. They said it themselves.

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Tell me remove the kinect whats the difference between 360 and One? the only difference is you have to install the games on the One. PS4 the UI, the controller everything imroved almost.

Thing we're overlooking: the Xbox One isn't exactly failing. It's just getting stomped by its competitor.  It's doing better than its predecessor-- which did better than its predecessor.  It doesn't have the global appeal that PlayStation does but considering that they launched at almost the same time, it could be a lot worse.

It was rumored that Sony would bundle the PlayStation Camera with every PS4 for $499. They were also rumored to have some sort of DRM, and these rumors aren't far fetched given Sony led the charge with online passes. They also filed some sort of patent related to DRM. It seriously wouldn't surprise me if Sony planned to have DRM and then backtracked after seeing MS get torn apart by the press. Developers backed away from it after E3 2013. 

No first party Xbox 360 games had online passes (that I remember anyway). I bet MS instituted DRM because publishers told them to which led to their trasnparency about it. Multiple first party PS3 and Vita games had online passes, so it's likely that Sony planned DRM early on with the PS4. They probably weren't as open with it as Microsoft though. Publishers backed whoever had DRM and MS was open about it and that is why they had so much support at E3 2013. 

...or this could all be bullshit and I am overthinking everything. 

The system was rushed I'm guessing a year ahead of time 

It was clearly rushed. They didn't even have DTS ready on an all in one marketed device.