Not only did they give us some of the best first party games (second only to Nintendo, in my opinion), some of those were new IPs, something Microsoft just can't manage. Bloodborne, Horizon Zero Dawn, and Ghost of Tsushima are all amazing games, with Bloodborne being probably my all-time favourite, not factoring nostalgia for SNES games. (Seriously, my top 5 of all time are SNES games, followed by Bloodborne; THAT is how good that game is).
I could ALMOST count The Last of Us as a new IP this gen as it was released in 2013, but I won't.
God of War is practically a new IP given its shift in tone and gameplay style.
Spider-Man is almost new IP in that it isn't a sequel to a prior game, but we can't REALLY count it.
Point is, they actually did a lot right this generation despite being without competition. PS2 had a similar situation. No competition, but ALL the greatest games (Aside from Nintendo, as usual). I agree with you wholeheartedly.
I think we can safely count the likes of GOW and Spiderman as new IPs. Or at the very worst, reboots.
But yeah, Sony's strength are its exclusives. And if you are buying a PS console, you just know that in addition to all the third party stuff, you are going to et those great exclusives. This is why I keep saying; with regards to Xbox, all the talk about power, price, gamepass, value...etc, is just fanfare and noise. Those things are all great, but they amount to nothing when the platform lacks the most important thing, and that's a good number of exclusive games.
What that does is that it allows sony just kinda be in the middle. They don't have to be the best at anything, just the best at being in the middle. They don't have to have the best services,just have to have th next best thing, they don't have to have the best price, just the next best thing...etc.
But the real scary thing about it, is that all the major advantages MS is pushing, are all things that if sony were to decide to do, would end up being really bad for Xbox. Just imagine Sony made a service like gamepass, even if sony's approach was that st party releases wouldn't be on it day 1 and instead come like 9 - 12 months later, the library sony has would make such a service better than what Xbox can offer.
Netflix pretty much killed the physical movies market just like Itunes/spotifyy...etc did with the physical discs market. Thats the kinda effect Gamepas is supposed to have. ut until companies like Sony and Nintendo adopt that model, its never going to happen.
Anyways, I just think MS should focus on their games and IP output. Start from there, then work your way out. That their tentpole titles in the 8th gen were gears, Forza, and halo (the exact same three with the 7th gen), spells that dilemma out clearly.