Then the next revision was included with the Xbox One, increasing the overall price of the console while still lacking compelling software.
If Microsoft had positioned it as an entirely optional accessory with a great library of exclusive titles, maybe it would have found an audience.
Nintendo got close with deemphasizing graphics on the Wii, but even they suffered from a mixed bag reputation. A bad console that is also an awesome fitness toy is worse than a good fitness toy that isn't a console at all. Marketing motion as an optional add-on is terrible. I believe that the Wii would have fared better if it had been even cheape/lower spec and motion focused with a parallelly introduced full version marketed as the Gamecube successor to keep the console expectations off it's back.
With today's technology (ubiquitous HD screens, consumer grade wired PCIe and well established GPU APIs) a possible compromise might be a low spec standalone motion gaming system that can optionally use it's full spec game console sibling as eGPU for added HD fidelty. The important property of this hypothetical ecosystem architecture is be that the motion part wouldn't be an optional controller for the big console, muddying the console's library with half-baked motion support but keep it's own focused library and just make that optionally playable with above-reference visuals for gear accumulators.