The biggest mistake was sticking with Kinect. Like Wii Motion, Kinect had run its course. A secondary error was allowing Bungie to go multi-plat. Halo is old news now, but Destiny is getting great hype.
In hindsight, the best strategy for XBox would probably have been to allow Sony to launch PS4 without competition last year. See the specs and 1-up them in every way. Keep Bungie under the MS umbrella, fund Destiny and launch XBox Infinity (the name One is also a stupid mistake) fall 2014 with Destiny exclusive. With a killer graphics card and more RAM than PS4, make Destiny a game that can't be done anywhere else. Price match with the weaker PS4 at $399. And with that, continue to be king of the American game market.
In the videogame world you need a killer game that everyone wants, a good price and the impression of being high-tech. One's power deficit to PS4 isn't a big deal, but the lack of a state-of-the-art, must-have image is.
PS4 has gotten by without a killer app, but mostly because the launch of both One and U were debacles.
