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I think people underestimate X360's role in damaging the brand.

X360 and PS3 contrast each other in interesting ways. When you look at them in isolation, X360 was slightly more successful. When looked at in a Gen 6 context, X360 was waaay more successful. But PS3's strong 2nd half as opposed to an increased focus on Kinect would snowball the brands into what they are today.

Microsoft's high confidence in Xbox One and Kinect should be studied. They acted as if X360 was their PS2 in mindshare and nothing could stop them anymore (even if X360 was the PS2 of its gen, they should have learned a thing or two from the PS3 mess which almost got the Playstation brand killed).