I agree with jhlennon1, they need to find a way to catch on in Japan and with casuals and that (in my opinion) will require them to come up with new and innovative software and hardware (peripherals in the 360's case). All that plus a $200 price point.
Halo 3 will attract some of the Xbox 1's hardcore fanbase that hasn't already made the jump to Xbox 360 (there're millions of them) but it's very far from being able to draw in the tens of millions of people that will be required if the 360 is ever to seriously challenge the Wii (the odds of which are stacked very much against Microsoft).
I think the only way Microsoft could ever hope to achieve any of that in the next few years would be to allow people who have a passion for games, lots of creativity, and a real visionary run the show rather than just corporate suits. They basically need a Satoru Iwata type of person running things.
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