I think it was actually MS's best conference ever. They broadened the scope of their offer to more than just shooters and tried to appeal to a broader audience with japanese fames, family games and even mmo's.
With that said, i'm of the opinion that they are a very weak first party. To have a chance to actually regain market share they have to appeal to these broader audiences. I do think an expansion of the first party studios and a rebranding or partnership of their box is necessary if they want to seriously have a box with a worldwide broad appeal.