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Xbox is necessary, but not solely because of competition. Competition isn't wholly positive either. What I think is more important is that the more choices there are the larger the market becomes. Xbox ends up improving but by generally being the worst of the two, at least with regard to the consumers. The OG Xbox was the most consumer friendly one, and every following gen it screwed over the consumer a bit more and its original install base. However, what it did well forced PS to adapt as well cause it went in targeting its marketshare.
Xbox has gotten away with a lot of crap, and that is what the competition notices as well.



In this day and age, with the Internet, ignorance is a choice! And they're still choosing Ignorance! - Dr. Filthy Frank