I mean, this is definitely MS' take on it internally. Betting that being the best place to play third party games on a technical and service level is worth more than a strong exclusive lineup this late in the game isn't without sense, but between PS' mindshare advantage and the 499 price point I'm skeptical how well it'll pay off for them.
Yeah. I thought, man, we're gonna see them address their first party situation head on this E3. And in a way, they did: they showed that they are wholly uninterested in expanding their first party catalog.
Next year, we will get a big Halo 6 blowout, a new Gears teaser, another Forza game, and that right there already consumes half of the conference. "Xbox is Better than Ever." "Wow there was a much bigger presence of first party this year!" and so on.
They are playing the services game. Games as a service, Xbox as a platform service. Hey, remember 360 games? Here's a backwards compatibility program, a Games Pass program that lets you play as many as you want, and a Games with Gold program that gives you free 360 games every month. And not only that, it's expanding to the original Xbox! Think about that- three different services for one kind of platform, on one console.
If I had to guess, MS blew most of their budget on Xbox One X instead of first party. If they had to make a choice, I suppose they made the right decision, since it is vital they hold on to their market for as long as they can. In the meantime, they can build PR wins with BC compatibility, new dashboard features, doing things Sony isn't really wanting to at the moment (cross console play), etc. Phil can always blast on Twitter with a "hey we hear you guys, we listened to your feedback, and we're definitely going to be sharing this with the Xbox team to bring you exciting announcements for next year!"
They are uninterested in first party development. The times they've had partnerships with studios either ends with those studios going multiplatform (Remedy, Insomniac jumping with Sony on Spider-Man, Playground, Respawn with Titanfall 2), cancellations (Scalebound, Phantom Dust) or something out of their control (Crytek closing or on the verge of closing), or even just poor performance (think we'll ever see Halo Wars 3 after those sales?). Sony has their share of duds too, but they keep pushing forward. We're even getting a Knack 2 for crying out loud. Why doesn't MS want to take the risk with a Sunset Overdrive 2? Oh, because they don't own the IP. Guess they'll let that partnership dry up then! (We didn't even get any "exclusive partnerships" this year, aside from indie and lower budget titles.)
Xbox is not what they once were, but that's entirely the plan. They are moving into the services industry. First party is not a priority aside from their three tentpole franchises, and they're ok with that. I wonder if gamers will be too.