Microsoft lost the core and hardcore gamers, which is the most important groups to have when launching a console. They're the early adopters who then convince their casual friends to get the console.
I think for a lot of the gamers, Microsoft burned away any goodwill they built in the early years of the 360. The last 2-3 years of the Xbox 360 were garbage, where they were just releasing fukking Halo, Gears, Forza (kinda like this year lol). Meanwhile Sony started last gen like shyt, but with PSN+, The Last of Us and Journey in the last year or two of the PS3, they became the favorite going into next-gen.
And then yeah, MS dropped the fukking ball with forced kinect, DRM and all that other bullshyt they were ready to do.