At E3 2013, the Xbox One was revealed to the public. Despite some promises, Microsoft announced some features that weren't met with praise, but rather immense criticism and backlash that, to this day, continue to hurt the console's performance.
The console's name was ridiculed. Gamers pointed out that it would cause confusion with the first Xbox, and joked about what the Xbox One's future succesors' name would be. The first Xbox was nicknamed "Xbox Original".
One feature that was poorly met was that the digital rights management style that would install games on the console and be bound to the gamer's account. To keep the licenses synchronized, the console would have to connect to internet every 24 hours. The reason this was met with dislike was because it would infringe on gamer's first-sale rights on the physical disc of the game, rendering the disc near useless upon first use as well as making the game licensed to the gamer rather than let them own it, even after buying the disc. Essentially, this meant that you could no longer buy used games or lend them to your friends because the discs were useless. In essence, Gamers no longer would own the games they paid for, they'd only rent them with Microsoft's permission.
Freedom with game ownership once purchased has always been one of the main advantages consoles have over PC, taking that away from the Xbox One made the console look irrelevant, as it was essentially just like Steam. Not only that, in a few years once the Xbox One is discontinued, it's servers would go offline and every single Xbox One game would become completely unplayable
The 24 hour check-in restriction received the most amount of backlash for a simple reason: There is NEVER any guarantee that the console will consistently get internet access every day without fail. Should you have connection problems, go on a trip, have long power outages, move to a new house, live in a place with bad internet or no internet at all, or Microsoft's servers went down for whatever reason, your Xbox One would become an oversized piece of useless plastic. This also meant the Xbox One would be an always-on system.
The Kinect add-on, while improved upon, was also heavily criticized because of privacy concerns as Kinect could have been used for surveillance with it's face recognition and ability monitor a gamer's heartbeat combined with the always-online requirement. This was made worse when Microsoft announced that using the Kinect would be mandatory.
Finally, during the event, Microsoft's game list showed very few games that made the Xbox One not worth buying at the time, showing more entertainment features than actual games and little to no innovation over the Xbox 360, and it didn't even had backwards compatibility. The Xbox One was seen more like a glorified cable box than an actual game console with many anti-consumer restrictions. Microsoft also said that if gamers didn't want these restrictions they should just stick with an Xbox 360, this comment only made the backlash worse.
This event pushed the PlayStation 4 in a more positive light and increased its sales when Sony announced the console wouldn't have any of those restrictions and would be a more consumer friendly console. Tom McShea, an editor at GameSpot even went so far as to call Microsoft anti-consumerist, punishing its loyal customers with strict regulations. Gamers also accused Microsoft of being greedy for demanding more money to use the games they already paid for via these restrictions.
Microsoft began a massive damage control campaign, trying to defend the restrictions and price, praising the console whenever possible, and hiding criticism. There were even rumors that Mircrosoft was bribing third-party developers not to show Playstation 4 games. This predictably only made Microsoft look even worse. Gamers en masse declared they wouldn't support the Xbox One and migrated to the PlayStation 4.
Microsoft eventually withdrew its restrictions and functions due to the insane amount of backlash and the PlayStation 4's pre-orders far outmatching the Xbox One's. Strangely enough a Change.Org petition to restore the restrictions was made (which thankfully failed). The Xbox One was mockingly nicknamed "Xbox 180" after this announcement. Microsoft's decision to undo the DRM restrictions was seen as a victory for gamers, as they were able to prevent these anti-gamer practices and prevent others from attempting to do the same
Despite Microsoft removing these restrictions, they permanently soiled the Xbox One's image and the console has had a rather slow growth. PlayStation 4 quickly became the go-to console for most gamers and is currently the best selling console of its generation with the Xbox One lagging far behind.