Not many Xbox gamers care if their games are 1st-party or 3rd-party (Halo is an exception, of course). Most people don't even pay attention to who developed or published the game, they just want to play something good.
The only time people care about 1st-party games is when it's Nintendo related. Microsoft could do a better job at broadening their 1st-party development if they truly want to compete with Sony and Nintendo on that level. Sony has dozens of exclusive studios around the world, and Nintendo does most of their development in-house.