We all know Microsoft screwed up.

[Madword]

They got their original messaging so wrong in so many ways.

Ironically it did feel like a terrible period of miscommunication and poor judgement.. i thought the wii-u had bad messaging but the XBO - just terrible to be honest.

• Price. They got well and truly thumped by Sony. If MS had gone in at £349 (no Kinect bundled) then Sony would not have been to be able to go lower due to be financially strapped. MS had a chance of potentially damaging Sony big time and missed it. I don't think it matters when they are now the same price because of this mistake... i.e it's all too late to fight on the same price.
• DRM: Absolute mess, it;s like they didn't know what the product they were selling was. Poor decisions and communication all over the place. A digital box that you cannot upgrade the hard disk....wow.
• Hardware design: Massive box, batteries still required for controller, non replaceable hard disk. People want more from their hardware, and those things just seem like poor design, it puts people off.
• Power+Price: Let's be honest the gaming world has changed, massive recession etc... people want the cheapest price with the best power. Their decision to work with kinect and lower performance stung them big time.
• TV.TV.TV: What a mess. Seriously who in their right mind would think leading with that would have been a good idea. That just dropped confidence in MS that they knew what they were doing. But it was so USA focussed, when last gen they knew Sony beat them good in Europe.... so lets just focus on the USA again... weird.
• XB360: There is a feeling that they just dropped the 360 with two years left, while Sony carried on. This did focus gamers on what console they might have wanted next.
• Sony Marketting: Really Sony did a fantastic job of marketting the PS4.... add this to the fact that MS did so bad, just made the whole situation worse.
• Titanfall: Ok not the game, but the idea that buying exclusivity still works... I think unless the game is AAAA... then people just get pissed that company A/B is paying to stop content going on another console. There are also a lot of one console buyers out there who have no care about buying one console and ignoring exclusives on another. So i just think there is less advantage of doing this type of thing and MS hadnt caught up with this fact.
• Consumer Loyalty: To be fair i thought this would have some bearing, but it's had little. I thought gamer points and achievements would mean people wouldnt want to move consoles, but the opposite is true. I believe MS might have thought people would be loyal because it was the case before.
• PS+/Gold: MS have lost sight of what a good service means. They created things that Sony on the PS3 couldnt do (because of the memory issues with the PS3).. but they threw all the good work away and let Sony basically thump them where it hurts. Provide a service just as good as Gold in terms of features but with additional benefits on top, and no paywall. Very good of Sony financially, and it hurts MS's bottom line.. double win.

There are many areas where they made mistakes..just listed a few. Some are fixable in the future, but I suspect MS will learn a lot from this (you would hope). They are starting to pull it back together now, but they are going to have to work hard and the hardware is one area they cannot really fix.