Xbox Went casual
Although Kinect released at the end of 2010, there are now some 10 million plus Kinects out there. That's approximately one fifth of Xbox consumers. With a sprawling library of games catering to a wide number of casual audiences, Microsoft has to be applauded for its reinvention of the original Xbox 360 console.
Xbox became mainstream entertainment
Xbox was already partnered with various movie and TV providers such as Sky etc. But with its latest update has integrated more TV options making the Xbox 360 an excellent entertainment hub within the home. Even if the Xbox doesn't take centre stage in the home, the added channels afforded to the console make it so mainstream it's hard to imagine how basic its humble beginnings were.
That deal with Youtube
Whilst many core gamers might scoff at the added extras the Xbox 360 now employs, probably the most notable addition has been its partnership with Youtube. PS3 has had access to the global movie sharing databased via its web browser, but the integration on Xbox is second to none. This is a 'big deal' and means that gamers now have easy access to a load of gaming and non gaming related content from within the singular console.
Home of the multi-platform
Forget exclusives for a moment and look at the multi=platform releases. They mostly sell more on Xbox despite comparable hardware totals. This is simply very encouraging for publishers and means that Xbox is the platform of choice for many gamers. Perhaps it's Xbox Live's superiority despite the costs which has helped pull in online gamers into its fold. The numbers speak for themselves that despite fewer console exclusives, multi-platform games simply thrive.
It entered from behind
The year head start was a well documented tactical move by Microsoft, and although Playstation 3 has now closed that gap, one has to consider that last gen, Xbox original was the new kid on the block and operated at a loss. It simply couldn't compete in terms of numbers with the Playstation's well deserved grip on the market. From mainstream media, to pop culture, "Playstation" was the word used to describe gaming console. Now however, you have artists like Ce Lo Green talking Xbox. Microsoft has done extremely well building from its foundations, making the risk well worth it now as it sits comfortably as a force to be reckoned with across global markets.
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Source: http://www.msxbox-world.com/features/article/924/top-5-reasons-why-xbox-killed-it-in-2011.html
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