The Xbox one is probably many things to MS but I believe failure is not one of them. The reason I believe this is because MS is not looking at this one console as defining their direction. Yes, MS had to change their expectations of the X1 after launch because of the wrong direction and marketing of the console. What MS has not done is gone in the red to gain marketshare. The division is healthy and it makes MS money. There is a focus direction on where the division wants to go and where MS wants to go with the brand and the hardware.
No the X1 is not going to ever make up the difference between it and the PS4 and I am sure MS has already gave up that battle. Instead its brand building time. Release solid hardware, release solid games carve out your services and build for the next iteration. Nothing is set in stone and from what I have seen, each company can stumble and next thing you know someone else is on Top.
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