It seems like they knew they couldn't compete at Gamescom and were scared off. You have the AAA lineup of Halo 5, Forza 6, Rise of the Tomb Raider, Gears of War 4, Halo Wars 2, Crackdown 3, Scalebound, Quantum Break, Fable Legends, Recore, Gears of War Ultimate Edition, Killer Instinct Season 3 and Sea of Thieves and they were focused on first party.
Now imagine if Sony had been at Gamescom and focused on first party, do you think they could have competed? The Last Guardian? It's been in development hell and wasn't even in a state during E3 to show us a playable demo. There's Uncharted 4 and Horizon that look pretty solid but where are the rest of the big guns? Where are the other big budget first party games that can go up against what Microsoft has already shown let alone the ones they haven't felt the need to but you know they're coming (Forza Horizon 3, etc).
Can Sony compete? Well they have third parties propping them up and there's nothing wrong with that but as far as first party games go Microsoft is opening new studios and gaining momentum while Sony is looking at moneyhatting DLC, making advertising deals and coasting through the holidays.
That's my opinion but maybe I'm wrong. Maybe at this next show they'll reveal three AAA massive budget first party exclusives that will get me excited but I'm not holding my breath.
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