Here is how Microsoft could easily redeem themselves and take the console war by storm no contest.
1. Ease off on the DRM. And by that I mean get rid of it, it's a sinking ship.
2. Constant online connection/24 hour check ins need to go as well.
3. Make it so kinect 2.0 is not required to use the console.
4. Announce another package of the console that does not include the Kinect and drop the price 100 dollars. This puts them in direct competition with ps4 and solves the kinect rage. They should also have their kinect bundle but that should stay at the 499 price point.
I personally think they would blow ps4 out of the water if they did this.