Of course it's salvageable.
Hypothetically, what happens if Microsoft takes the crazy route and makes ALL their games including Mincraft updates Xbox exclusive? Software sales would greatly suffer in the short to medium term and some IP's would disappear, but the Xbox platform would flourish.
It's just a question of whether or not Xbox is worth sacrificing software sales/brands for. Microsoft's answer seems to be "heeellllll no!!!" and it's understandable; they make an insane sum of money outside the Xbox platform. It's a serious risk, because Micorosft is now a bigger 3rd party publisher than they are a platform holder.
I don't think Xbox is salvagabe without exclusives. In terms of quality, it's actually a very solid platform as it is, but popularity wise it's losing ground to PC, Playstation, and eventually Nintendo due to a lack of identity. More and more people will ask themselves "why am I here and not on another platform?", and this imo can only be solved with popular and quality exclusives that you can't play anywhere else.
