One of the biggest reason we get excited for E3 is the new game announcements yet Microsoft barely announced anything big.

They announced new 3 games.
Forza Horizon 3, a yearly franchise whose announcement means absolutely nothing anymore (not talking about the quality).
Dead Rising 3, we've learned that it's a timed exclusive coming too PS4 a year later.
State of Decay 2, a $20-$30 indie title published by Microsoft.

A game whose announcement means nothing, a timed exclusive, and an indie title. Those were the games announced for their biggest conference this year. Not 1 new IP, not 1 game from their 1st party studio that you could call "new".  Now obviously, I would consider Forza Horizon 3 too be a big game but it's announcement means nothing and even then, it's just 1 game.

For comparision, last E3, we got Recore a brand new IP, Sea of Thieves a brand new IP, Gears of War 4 one of their biggest franchises.

All of these games are bigger than what they showed this E3. They also showed showed 2 "old" games, GoW Ultimate and Rare Replay. And even for E3 2014, the games they showed were a lot bigger.

Now some of you might be thinking, maybe they'll announce some new games at Gamescom? I extremely doubt it.

Last Gamescom we only got 1 new game, Halo Wars 2. And Gamescom 2014 we got Screamride(lol) and a port of State of Decay on XBO. Now sure, Halo Wars 2 was pretty big announcement but if they didn't announce 1 big game at this E3, their biggest conference, they most likely will not for Gamescom.

Another problem is, Microsoft doesn't have third party exclusives. They don't have games like Nier Automata, Ni No Kuni, Ni-Oh, Kingdom Hearts, and a shit ton more. 

Sony had 4 conferences last year and with each of them having quite a few new games.

We know they closed a bunch of studios and recently we got news that Microsoft was only working on 14 1st party games, which isn't a lot when you think about the games we already know and games like Forza and Halo 6, which doesn't leave much. So, is Microsoft running out of exclusives? 

Xbox gamer's don't need as many exclusives, nor do they need the Japanese titles. Different tastes, they're much more mainstream focused. Annual Franchises such as Forza aren't a bad thing for Xbox gamers, it's the type of thing they like.

Exclusives is just the term. Is Xbox running out of games? No.

They never had many to begin with. They've basically gotten by using the same three or four big franchises they have many years and throwing a couple other smaller games in the mix but honestly, if you want exclusives, Nintendo and Sony have always had more.

Games like halo and gears seem to get them by just fine so why mess with what works?

How so? We just learned that they've got 14 1st party games in development, Gears 4, Recore, Sea of Thieves, Forza Horizon 3, Killer Instinct, Minecraft, Scalebound, Halo Wars 2, State of Decay 2, Crackdown 3, games we know of. That's 10, then that leaves Halo 6, Forza 7, and Rare's Second Game. That leaves just 1 unknown game? That's not a lot. Also, I guess you could replace Minecraft with Ori 2.

Potentially the 14 games they have in development.

their exclusive efforts are certainly dwindling. and as you said this E3 was a huge indicator of that, other than a yearly franchise they had not one big exclusive announced. and having just 14 games in development is a really small number, specially in a middle of a gen.

Pretty solid list you have there if you ask me, plenty of cool games coming. Add multiplat games to the list and I don't even have time to play everything I'd like. Can't complain :)

I'm talking about the future, yes they have games right now but it doesn't look like they'll have much after a couple of years other than Forza 7, Halo 6, and Rare's second game.

PlayStation gets great new imaginative IP's and Japanese titles that Xbox gamers just don't care for. Dreams, Persona 5, Detroit, No Man's Sky. Xbox gamers just don't care about that kind of thing. They're getting what they want, the third party titles (titanfall, cod, battlefield, fifa, madden, fallout) and the staple first party franchises (halo,forza,gears)

Xbox gamers aren't going to be complaining because the lineup is great for them.