I think they are still suffering with he reputation that their hardware is unreliable. The 'Red Ring of Death' is catchy, and while really hasn't been a problem in a while, is still in people's minds. It didn't help that when they introduce the Xbox S, and the first reporters moved it while it was running and shredded a disk. (I understand a little damper would have prevented the problem.) They need to make sure the system is strong enough to handle the silly things some gamers and kids do to their systems.
And price. I hope their new system is a powerhouse - with improved Kinect quality. While it gets alot of hate here, Kinect is actually pretty good, but makes you realize how great it could be. But ever little step requires, I estimate, about twice the power. More power, higher price.
They have shown that they don't need Japan's support to do well. It would be nice if it would be supported in Japan,
Third, I think they should show the 'high maintenance' gamers they are still committed to the core. It's not a requirement, but they are the ones that really built the first Xbox, and it would benefit their reputation if they refereed some new hard core IPs.
Edit: Figher reminded me of SteamBox and perhapse Apple or Google might make a game system - or work with a competitor. They could be trouble.
I don't think the cost of Xbox Live is a big deal, as I think the others will go that way too at some point.







