As said below, we won’t see any new big franchises until next generation. Is it too late? No, it’s never too late. Look at Sony for a perfect example. They took every cent they made from the PS3 era on and invested it in first party studios and he has paid off for them this generation.
I expect, since we are about 2 to 3 years out from next generation, that Microsoft is going to have one hell of a launch for the Xbox 2. Though, whether that will pan out for them or not really depends on their ability to understand what kind of games the fans want and if they can deliver a top-tier AAA experience within those parameters. They have delivered first party titles this generation, many new franchises, the problem being that they weren’t well received.
So it’s really up to them to deliver the games that people want to play. Both AAA single player titles and engaging, expansive multiplayer games. They also need to try to break into the Japanese and European markets and try to compete with games that those territories enjoy. Which has been a huge issue for them since the start. It would be very easy for them to just buy current studios that are already making those types of games in those territories, to at least get a foot in the door.
So, the ball is in their court to either dribble or slamdunk.