I think they do exactly what Sony is doing. Offer cross-generation services (Vue, Now, PSVR) that make gamers invest in their platform over very long periods. Significantly invest in 1st party studios, like dump everything into that because I honestly think it will help the brand the most.
Outside of that, the brand is here to stay, sure they are not the defacto video games brand, they will have to outdo Sony on ever level to earn that title, but people still recognize them as the other major console brand.

I do believe that Microsoft has a clear vision of where to go, the problem is they don't have any pedigree, which is what their competitors are selling on. They never really had a chance.

Messed up thing is that they aren't even trying to build that pedigree. they can't ride on the back of Gears, Halo and Forza forever. 

I like Xbox and 360. That said. MS never felt like they contributed to being in the console space. We had online services with SEGANET before XBL. SEGA pushed SEGANET really hard. Every DC had a modem out of the box which was a first and the first console with an MMO in PSO. NFL2k you could play online. They pushed the hell out of it. The first time a console seriously pushed for online. Xbox from the API to the concept was really just a continuation and improved Dreamcast. XBL improved on it sure but XBL is no longer that great service it once was. Achievements are not a real contribution. It's a sticker.

Thier first party has mainly been PC like genres. These days it's just Halo a series in decline and a yearly racing series that is pretty much the same game from the previous year. Sony and MS offer very similar hardware but Sony offers more variety in a library. The Switch is something actually unique to this gen of consoles while quickly building an interesting library. MS is stuck in the middle without a paddle. Ok, so they released the X. The library is the same middling nowhere in exclusives. X is a diamond ring in a pig's snout. I truly don't know where Xbox goes from here but I have felt since late 360 eras they should just turn Xbox into a PC gaming service and drop the console space. 7th gen as the exception, gaming typically never has room for a 3rd console. One of them typically gets left in the dust. Atari 7800, TG16, Saturn, Gamecube, Wii U and while Switch is new, it is selling much better than Xbox. I just feel the brand doesn't bring anything to the table anymore and questionable if it really ever did.

TurboExpress and SEGA Nomad. Nomad esp as it was just literally a Genesis in the size of a Game Gear and took Genesis carts. It hooked up to the TV and had a port for a controller for 2 players. Nomads issue was it came out at the end of the 16-bit gen in 1995,3-hour batt life on 6 AAA's and cost 180 bucks in a time when a Game Boy was 130 bucks less.

The thing is that to even have a chance to compete against the massive brands of Sony and Nintendo they would have to put a gigantic amount of money into it. Like more money than Nintendo and Sony put in combined, while risking not to succeed anyway. That's a pretty huge ask. Normally I'd say that MS should put in the effort to make themselves a proper competitor but if this gen has shown anything it's that competition in the console market means shit. There simply is no competition since every competitor thrives in their own bubble with barely any influence from others.

So right now the best bet for MS is probably to be financially profitable. What that means for them, I wouldn't know. But they don't seem to want to drop the Xbox brand anytime soon.

For me the early 360 was a stand out console, the blades system was a breath of fresh air, and afaic, kicked the ps3 xmb's ass, why they scrapped it and went with metro and progressively made it worse and worse over time i'll never know.

I used to enjoy browsing through xbox arcade looking at titles to try, now i avoid the xbox store like the fucking plauge.

Also, the "hdd included out of the box" thing someone else mentioned, given that it was an optional addon for the PS2, it wasn't an innovation, it was just a natural progression, and while people may argue that "but the ps2 hdd didnt come out until xbox had been announced" you cant hide the fact that it has a cavity space designed for hard drives by design, from launch, either.

You're going to get some arbitrary reason why it doesn't count, just you watch.

I think Microsoft is looking for a way to bow out gracefully from the console space. Mostly what they would like to do at this point is

1) Leave console gaming while somehow saving face.
2) Transition as many XBox1 customers to the PC as possible.

Their bread and butter business is PC software anyway. Not PC gaming, but PC software like Windows and MS office. Any excuse they can get to keep people using PC is good to them. Either XBox1X is their last iteration or we will maybe get 1 more hardware iteration and then they will transition fully back to the PC space and out of console gaming.

Hopefully, if they’re serious about GaaS, they just go full on third party and start putting their games on PS as well.

Don't really agree with the holder part. Especially when it comes to Sony and MS. 

I get what you mean though., but that really only applies to Nintendo because we'll Nintendo always kinda does their own thing. And by that I just mean a thing that's different from what Sony and MS usually does. 

But back to Sony and MS.... while the market is big enough for two twin competitors to thrive I don't think we can say the success or even the presence of one doesn't influence the other. One way to look at it is that the PS4 would probably be an at least 80M seller right now if the XB1 didn't exist. or the XB1 would be a 80M seller if the PS4 didn't exist. The XB1 will be an always online thingy right now if the PS4 didn't exist or the PS4 could have been a $600 console if the xb1 didn't exist.