Yes, this is it. Most of us want Xbox to be competitive. If ONLY to keep Sony and Nintendo honest. The problem is that MS stepped in with the good thing Xbox 360 had going, brought in a Kinect and tried to force other parts of the market in and gamers weren't having it. 2005-2010 produced some of the best Xbox exclusives and some of the best all time games. MS pissed it all away and they largely still have many of the same people there.
Xbox was GREAT when it focused on great games. Sony figured this out and has been unstoppable ever since.
Nowadays, Xbox has too many hands into too many different places and not excelling at any of them. However, the biggest turnoff for Xbox from me is their constant engagement with people like Tim and Colt. They are good at winning interest browny points and use them as mouthpieces.
I do not like Gamepass and do not think that it is good for the industry, nor do I believe it is sustainable.
As of right now, I just want Xbox to go 3rd party. Given that Starfield failed to move the needle in anyway, I am utterly convinced that there is no hope for them. Deep down people like Colt/Timdogg understand this, which is why they just lash out and people like RedDragon troll them mercilessly.
And yes, I do believe within a few years Starfield will be released on PS5.
Only thing I disagree with here is that Xbox needs to stick around to keep Sony & Nintendo honest. PC (Steam), mobile and even cloud, let alone each other, will be enough to keep Sony & Nintendo honest and competitive. We don't really "need" Xbox around as a console to ensure that, plus if customers feel like their needs aren't being met, they can always stop buying systems & content.
Otherwise everything else I feel is more or less spot-on. Especially the part with MS being a jack-of-all-trades, master-of-none. They remind me very much of mid-late '90s Sega in that regard. Publishing a ton of games but most not gaining any real traction. Multiple consoles with highly different specs being supported concurrently. Software resources being spread thin (in Sega's case, mostly with segment-specific games (arcade, Saturn, Pico, SegaSoft, etc.); with Microsoft, pushing Day 1 across many different configurations (Xbox Series, whole ranges of PC specs, cloud etc.)).
It doesn't matter if MS's a significantly larger company than Sega ever was; Xbox as a division is much smaller than Microsoft, and upper management resources are always finite in terms of how well they can balance focus across multiple avenues. The scale of each things in the industry these days is much larger than back in the '90s so it's not like Xbox as a division has magnitudes more overhead over these areas for managerial purposes than Sega had during that time. Maybe a bit more, since they aren't having corporate infighting between different branches, but that's about it.
I'd even say Microsoft's situation is worst in ways. Anyone who tries telling me PC isn't cannibalizing console sales is lying, or at least very misinformed. Steam and consoles share at least 80% of the same games which aren't bottom-tier low-budget indies and fangames/mods. PC game sales revenue increased in the early 2010s directly correlates with a decline in the end of 7th gen from mostly enthusiast 360 owners (and some PS3 owners) going over to PC (or back to PC), plus some Nintendo owners shifting to PC after the Wii sales fell off a cliff around late 2011/early 2012 (even if many more went to mobile instead). Not only that, but we now have data basically showing that while games on PC may move a good number of copies (particularly on Steam), the average revenue per game is significantly lower compared to consoles, so the average ARPU on PC is therefore significantly lower as well.
The idea some people use to then say that, say, porting games to PC doesn't hurt console, is nullified IMO. It influences console owners to either switch to PC to access the games for much cheaper, or hold off on buying them at launch prices on console. With Xbox in particular, this is even further hurt due to the effect of Game Pass conditioning a lot of people there to just be content with what the service offers, not buy many (or any) games at launch, or if they happen to have an Xbox & PC, just use Game Pass for 1P content and still do all their 3P access through venues like Steam (where MS gets no 30% cut on software sales).
Even in the mid and late '90s, Sega didn't have quite those types of self-inflicted wounds, and while they did rely a lot in cases on say arcade ports (usually without a lot of extra content for the home), arcades weren't readily available for the average person to buy and place in their own homes. The number of venues with modern arcade games also dropped off quite a bit during that era, so for many it wasn't necessarily easy to just "go to the arcade" to play those games. Things like that ensured there was still natural value proposition for systems like Saturn and Dreamcast even when they were getting a lot of the arcade ports (of course, having non-arcade port 1P software also helped).