Xbox head Phil Spencer says the division is now focused on regaining consumer trust, rather than beating the PlayStation 4.
Speaking at Geekwire Summit 2015, Spencer admitted the Xbox One may never reach the PS4's level of success, but that it doesn't matter anymore.
Spencer says his goals have changed from "wanting to win" to reforming consumer confidence following the Xbox One's shaky launch.
"You'll hear me talk less about the competition... It's about the games we have and how we treat the customers who buy our box," Spencer explained.
He referred to policy changes like used games on Xbox One, Kinect bundling, and the popular recent announcement of backwards compatibility support for Xbox 360 games.
"We didn't know back compat would work. We started it, a few ninja engineers went off and figured it out - how do you go from PowerPC to X86 and translate game code that's about as time-critical as any piece of code that you would want in terms of its performance? They got it done."
Spencer also indicated the Xbox team's refocused attention on the consumer had revitalised the team itself after a dispiriting launch.
"I'll say we're not motivated by beating Sony, we're motivated by gaining as many customers as we can."
But the Xbox still has a ways to go, having sold about half the global units Sony has this console generation.
"Regaining that trust and the mindshare with the customer, the gamer, is incredibly difficult."