Well, in my opinion, what he said about making great games isn't enough = not necessarily false.
Sega did exactly that on DC days - quality, quantity, innovation, aggressive marketing, but still failed. Sure, they did f'ed up many ways internally and externally - but in the end, consumers didn't side with Sega and chose PS2. While this gen is only a couple years old - it does seem like it's a repeat of last DC/PS2 days in many similar ways. Like Sega, MS f'ed up last gen. Tried to come back (Sega = early launch + built in modem, MS = "supposedly" more powerful H/W + Gamepass/BC), but ultimately failed.
Or something like Pokemon games on Switch - that many found it technically outdated, even if you consider Switch being a very outdated system... but still sells tons of them.
Being able to read the target market, appease & keeping up and garnering their loyal audience while gently "leading" the audience to the company's next goal is just as critical as creating good games only.
Sony and Nintendo did exactly that with their respective hardware and all, successfully garnering their loyal consumer base. Always sticking to what they do, but adding and changing things a little by little in snail's pace. (service wise, not the hardware wise, I mean.) Sony garnered their 1st party games into cinematic experience type games for over a decade, and slowly moved to the west throughout PS3 to PS5. Over a decade. Nintendo stood firm on their ground, with their own blue ocean strategy over a decade too. MS? They seem to apply "Windows" style universal approach, which worked for them for many years... which in service wise makes sense... but lacked focus. In this case, gaming. Specifically, when the platform is inhibited within a physical object called a "console". Just like their failed windows phone strategy, which tried to mimic Windows.
Brand Loyalty is something that's earned over many years... and sometimes people just go with that brand in many cases. Just like many PC gamers choose Windows, because it's their only real viable option, even if they don't like Windows at all.
This is why, Xbox is still "green", I guess. But then again, "green" is color of the $, which they've got ton of. I'm sure MS will stick around as long as there is a market to be fought and get profit. The situation isn't as dire or bad like Windows Phone vs iPhone/Android... Perhaps they are losing $$$ on game pass, and this whole sub-burst on Netflix/Disney Plus era, maybe they'll be looking into something else... who knows? Right now though, I don't think MS would fold Xbox consoles yet. The pie's too big to ignore, even at 3rd place - unless they are losing ton of money. Most radical thing I can see, is that they may re-evaluate the Game Pass strategy, which I think is a very viable option for them at this point. (I'd rather whip/drill the 1st party devs though - but a company like MS just can't do that, I don't think. HR issues galore!)
However, if MS' own 1st party can't generate steady stream of quality AAA games to match their competition to begin with, there's no chance in the world MS can win against Sony or Nintendo. They can't afford f'ups like Red Fall... and that's the bare minimum to stay in the game. Starfield has to be a fantastic mass pleasing game, and that's the bare minimum.
Having said so, again, I do think what Spencer is saying is not necessarily false. Having a few great games on the system, it may appeal to hardcore audiences like ones on this gaming enthusiast board - but for many people or people who don't have luxury of owning multi-consoles, many would just go with what they are familiar with. Just like GTA5 is still selling many copies, generations after generations.