Lack of variety of games. Before most gamers will invest 300 - 400 for a system they look at what kind of games are on the system.
Lack of perceived value - The gamepad increases the cost of the system, but many gamers don't see it as a necessary component or really adding a lot of fun to the game.
I want to add to this, if you look at what Microsoft did and how they quickly corrected their mistakes. With the Kinect, Xbox1 cost 500. Their sales sucked the first year, they dropped it, reducing the cost of the system to $400, and even did a price drop down to 350. They also shifted the conversation away from intrusive DRM, doing away with used games, xbox is the all in one console, and telling people to get over it in terms of always being online and shifted the conversation to these are upcoming exclusives, more game centric, and even some innovation such as Hololens. Their sales have improved signifcantly. Will they win this generation? probably not, but they will sell enough to justify making another console for next generation. I think the next big thing Microsoft could do is a thinner redesign of the xbox one.
You could even say the same thing, about Sony last generation. Our console is the one that does it all, but it costs 600. Oh we screwed up, and they changed it and managed to turn the ship around to their credit.
Looking back a few years from now, I really hope keeping the gamepad was worth it because without they could have dropped the system down to 250 perhaps even 200 and sell it as a budget console or a secondary console where more people would bite. Instead of selling perhaps 20 million lifetime which is optimistic, perhaps it could be more like 30-40 million while selling more of their 1st party games at 50 - 60 a pop due to a larger install base. Not great, but good enough to justify continuing to make consoles.
