My analysis:
1. Initially, they underestimated Sony as a competitor.
2. They assumed Kinect would attract a more casual audience, so no first-party games were developed by internal studios, relying instead external publishers first-party titles.
3. Their primary focus was capturing the TV market.
4. In terms of hardware, they opted for the same fast cache chip formula, which was not powerful enough to support 1080p resolution.
5. The Kinect hardware added an additional $100 to cost, and it was imposed on consumers.
6. The always-online and the policy against second-hand purchases were significant missteps.
7. Ultimately, greed and a flawed understanding of audience desires led to their downfall, from which they never fully recovered.
Proposed solutions:
1. Launch a console with at least two strong exclusive games, followed by the release of more exclusive titles.
2. Regarding hardware, they could have retained the chip excluded Kinect.
3. Focus on acquiring better studios and produce more first party titles.