OK, the Switch has been selling on Amazon at up to $420.  Wow! I can't believe ppl are willing to pay that much for relatively weak technology! But they are in droves. It's been giving PS4 serious competition despite a higher price and low availability. Pretty much everywhere but Europe, where PlayStation always rules. 

Now Xbox One seems done. It is in such bad shape that Switch will likely catch up to it quickly, despite the 3 and a half year release lead. Microsoft seems to have already lost to PS4 and Switch. However, that may not be true. Here is my theory:

Xbox One X could turn things around for Xbox. If ppl are willing to pay over $400 for the low power switch, $500 for the most powerful console ever seems like a no brainer. The only problem is that Xbox has almost no true exclusive games coming. Phil Spencer has made a mess out of Xbox. Only one major exclusive first party game this whole year! That is Halo Wars 2. It has under performed badly though, despite being Halo and having little Xbox competition. Forza is not a huge seller, despite great reviews. Even Gears of War is not doing as well as last generation. 

Microsoft relies too heavily on Forza, Gears, and Halo. They abandoned Fable and Alan Wake, cancelled Scale Bound, and another major game, that escapes me right now. They depend too heavily on 3rd party games, they have few Japanese games, and worst of all, they allow most of their best exclusives to be available on PC too. So how could they turn Xbox One X into a game changer?

Glad you asked! 1. Pay for major exclusives like back in the 360 days. Microsoft is not near broke. They could fund games like Lost Oddysey and Blue Dragon again, get back Call of Duty, and stop putting their games on PC and have true exclusives. They could make back the money and more with the game sales. 2. Invest into first party studios more. Bring back Fable. Make new IP's. Don't let go of talent like Bungie. 3. Make sure that every bit of juice is squeezed out of those 6 teraflops for even 3rd party games. Gradually move away from Xbox One S backwards compatibility. Maybe after one year. Have X exclusives that can take full advantage of it's power. 

Microsoft said they had many more exclusives to announce this year. If they are true exclusives--not timed console exclusives--they would do much better. The timed exclusives are OK, but not big enough to put Xbox back in real competition. What they announce at Gamescom could make or break Xbox. 

To conclude, Switch is selling very well with one teraflop of power and at over $400. Xbox One X is six times more powerful for about a 25% higher price at $500. If they can just bring the exciting, exclusive games, Xbox should be able to sell very well. Crackdown 3 and Sea of Thieves won't be  near enough. Maybe they have some Xbox saving announcements coming at Gamescom. Thanks for reading. 

They would need exclusives that are more popular than Sony's and Nintendo's IPs combined. Good luck with that.

Also, stop telling console makers to create exclusives. That's terrible!

Paying for third party exclusives really doent help them in the longer run. Microsoft is better off building new studios and developing new IPs that they can own.
The XBX really isn't going to set the industry in fire sales wise and I think MS knows that. At first it will be for those that want the best performance from consoles, hardcore Xbox fans, and tech enthusiasts.
They probably expect it to sell better down the line as a cheaper entry level console that can play ninth gen games with their no generations approach.

Erm, correction, Switch has 0.2 tflops in handheld mode, 0.4 tflops docked. XBox One X is a measly 15 to 30 times more powerful. Won't matter one bit!

Will matter to third parties

Your entire argument is flawed and it's for a very obvious reason : People aren't buying the Switch at 400$ for power. You essentially said "Wow, people are buying a weak console for 400$! Of course a powerful console like Xbox One X has a chance at 500$!" No. Consoles very rarely get bought for power.

And your list of reasons could be said by anyone. But they won't likely happen.

Third parties don't matter to Switch buyers though :p

People don't buy consoles for power. By that logic, the Xbox One shouldn't even be trailing the Switch in the first place since it's cheaper and more powerful.

Certainly not a long-term solution, that.

People have been paying $400 + for the switch because of scarcity and high demand. That has nothing to do with the Xbox One x and it's issues.