I'll focus on the bolded to keep this thread on topic. Your paragraph doesn't require many changes to match the thought processes that preceded 360 vs. PS3. What history has taught us is that the generational reset in the console business can change the fortunes of console manufacturers very fast. PS2 vs. Xbox was a clear win for Sony, PS3 vs. 360 was absolutely not a win for Sony, PS4 vs. XB1 was a clear win for Sony again. If you want it as simple as predicting a sudden shift based on historic sales data, then PS5 vs. XSX should be a significant loss in market share for Sony because so far a big shift has occured every generation between PS and Xbox. (That's not how proper analysis works, but you seem to prefer to simplify things beyond the point of rationality.)

For Microsoft's first party specifically, the sudden shift has already occured, but game development takes years, so it logically follows that the fruits of Microsoft's decisions won't be visible until years after the sudden shift had happened. Up till 2017, Microsoft's first party direction put an emphasis on the games as a service model and first party studios that failed to deliver got closed without any replacements for them. Beginning in 2018, Microsoft made moves to bolster their first party studios with several acquisitions. I don't need to explain that more studios mean that more games can be developed concurrently. Then again, this sequence of events has been lost on you, judging by your posts in this thread.

Sorry, but I've heard just too many times the beautiful phrase of "We are pumping so many resources in acquiring 1st party games, but please be patient because making games takes years". Well, many years have passed and nothing happened, so excuse me if I don't have much confidence in anyone claiming the exact thing right now.

As for the sudden shift, I don't see it. If anything the X360 showed how much weaker their brand is compared to Playstation. If I get a 90m head start in a 100m dash against Usain Bolt and finish a millisecond behind him, that doesn't mean I'm suddenly close to equal with him. No, it highlights even more how great Bolt is by still being able to win with such a handicap. Not only had the 360 a massive head start, every sale after it was basically compound interest due to a more competitive base and so many more people already jumping on it because there was no alternative. 

I don't agree with your analogy. The generation went on for 8 years before the successors hit the market. M$ was only out one year longer than PS3 and only sold about 5.5m during that first year. They wanted to sell 10 million before the PS3 released but that didn't happen *. There was a "Dreamcast effect" where people just wanted to see what Sony offered before buying. In every reveal, the PS3 looked to be a better system in every way, showing demos that looked better than anything the Xbox 360 was showing. AND it had fancy Wii like motion controls. You remember Sony saying "Next gen doesn't start until we say so".

And even then, Sony didn't surpass Xbox until after the PS4 and Xbox One were released *. And even that came at a huge financial cost.

There's a quote I read in a magazine that I can't find anywhere but it stayed in my mind. It was something like: Sony: "Their lead doesn't matter. We've been in this position before. Dreamcast first, PS2 later. PS1 first, N64 later. It doesn't matter what they sell. We'll quickly overtake them and it will be business as usual." And they had every right to feel that way. It was historically accurate. No matter what the competition did, Sony crushed them. They outsold the competition by five times during the 6th gen.

If you were running the 100m against Usain Bolt and he gave you a 15m head start and you barely lost by seconds even after blowing your hamstring early in the race (subtle RRoD analogy, there), that's actually something to be proud of. I'd say a better analogy would be Rocky vs Apollo Creed. Despite having nobody believing in him, Rocky went toe to toe with the champ. He didn't even belong in the same ring. He fought an amazing fight, almost won, and stole our hearts.

Then later, Mr. T easily beat the hell out of him and killed his manager.

*Sales figures are from memory. May not be 100% accurate.

But guys here will say Phill Spencer haven't said that nor did promise to improve the first party for several years.

But guys here will say Phill Spencer haven't said that nor did promise to improve the first party for several years.

Rocky managed to be champion on second movie, third and fourth, and even after retired he almost won again.

Don't see MS doing the champion on X1....

Well then they be liars. I’d say Phil was optimistic in his PR which you can’t blame him for keeping things hopeful. Seems BC, Xbox X and Game Pass was their main R&D for the first few years. Somewhere along the line they realized it’s easier to buy studios then form your own. Phil pitches to the CEO and the rest is history. 

It's been said at every E3 last few years.

Yes I agree and I don't blame him for being a PR person trying to promote his console the best he can (even if I point out the hypocrisis in some of his speeches) I just laugh when people deny that he is doing it and have been promising and not delivering until this last year of X1 (even if it doesn't really have a direct impact to releases on X1 anymore) excusing him that it takes years to improve the first party (sure the games to release will take time, but we can't say it takes 4 years to buy the devs, and then excuse another 3 years to release games).

Pretty much

They still came out with 3ds games during that time.