The Xbox One is slowly recovering, I agree with that part. As I've said all along, it's not going to be a blow-out by any stretch of the imagination. When all is said and done, I don't think Microsoft lost all that many core fans of the Xbox brand. At most, it lost a fair amount of those on the fence, but as said many times before, it's a marathon, not a sprint.
Microsoft's problem right now is that Sony hasn't screwed up yet. There is nothing to pounce on or take advantage of, as opposed to what happened early in the PS3's life cycle. Still, I don't think they'll be all that far behind in the first year and anything can happen after that.