Microsoft's problem is that they are slowly finding their way into a niche market. Sure, they have online, HD, dozens of shooters, etc, but that only caters to a very specific crowd. It's the same crowd that the Xbox catered to. Proof of this is while Gears of War sold 2 million in North America, the console sales were abysmal. That game didn't sell systems, since most of the audience already has an Xbox 360. Actually, console sales as a whole have been quite low for the 360 - written off in Japan, doing mediocre at best in Europe and even over here the sales were below expected. Microsoft is trying to take steps to solve this problem of theirs (Viva Pinata, Blue Dragon) but they just aren't effective enough. It's kind of like Nintendo with the GameCube.
Regarding the third-party tie in ratio, the DS was built from the ground up by Nintendo. Even though the GBA was the console leader, third parties were reluctant at best to support the DS. If there aren't quality games by third parties, how do you expect them to sell? Now that the DS is such an explosive phenomenon, third parties are finally starting to back it, and over the next year we're sure to get some third-party games that will sell very well. With the Wii, I'm glad to see that Nintendo is giving third parties much more of a chance by staggering their releases. Red Steel sold very well, despite it not being the best of games. We're seeing that, contrary to the DS, developers are more willing to jump onto the bandwagon earlier. I expect that at E3 we will be amazed by the new third party games that will be shown by developers who now believe in the Wii. The launch has showed that Wii owners are willing to buy games, now all we need is a few exclusive third party ones.