It started out as "The PS4, but with worse hardware, more expensive, forcing you to have an add-on no-one wants, and always-online DRM for all games."
Then it became "The PS4, but with worse hardware, more expensive, and forcing you to have an add-on no-one wants."
And then it became "The PS4, but with worse hardware, and pretty much the same price."
The console didn't have anything to positively differentiate itself from the PS4 until it got partial 360 back-compatibility near the back-end of 2015, and by then it was too late to salvage things.

The reveal was very anti comsumer. This led to bad word of mouth.

I doesn't run PS4 games.

Quality of games? and the games library in general?

More often than not, it comes down to games with consoles.
Power, services, odd features.... just dont hold a candle to games.

The main thing they did was flub the launch.  They bundled in Kinect, so it was more expensive than the PS4 while having a worse performance.  It was a worse value.  After that events snowballed in PS4's favor and against XB1 like more third party exclusives for PS4.  Microsoft decided XB1 wasn't worth giving serious support so they eventually kind of gave up on the first party front.  But it can all be traced back to how they flubbed the launch.

Microsoft placed their corporate vision 1st above all else. They did not create a product that the consumers wanted. They created a product in an attempt to dictate to the most marketable masses without the innovation and creativity that would normally set products/consumable goods apart from each other that caters to specific target audiences. So basically, they tried convincing as many fools as they can that what they want is what Microsoft has to offer. Nintendo caters to their fanbase. Sony caters to the gamer. Microsoft caters to whatever masses at large they can take their money from.

Poor start and many of their exclusives also being available on PC. I think people easily forget that Microsoft isn't just XBox. They're also PC. Contrast this to the other big two who focus most of their efforts on one respective platform.

A lot of it was Don Matrick's haircut.

Imho, 3 main reasons:

1. A colossal chasm in the quality of exclusive games. Just look at the 5 most awarded games of each year for the past 7 years. Playstation has the games with the largest number of prizes in the years 2013-2016-2018-2019 (4 out of 7 years), in addition if we consider the top 3 and top 5 of each year playstation shows fantastic results:
In 7 years, 9 of the 35 Top 5.
In 7 years, 7 of the 21 Top 3.

In the other hand, Xbox delivered "0". Exactly, during the entire generation none of the xbox exclusives managed to reach the top 5 of the most awarded ones!

-Source: https://gotypicks.blogspot.com/

2. Playstation had a gigantic advantage during the first years, being the console with better performance and with equal or lower price (the kinect era)

3. Playstation is better known and established than xbox. Xbox is very well established in the Americas and the UK, but in other markets ... Playstation usually has an advantage, mainly in Asia and continental Europe.

If you look at the total goty awards in the last 7 years the difference become gigantic.

Sony got 717, Nintendo 296 and MS just 7.