Most games being the same "to the naked eye" actually doesn't matter a lot. People will often gravitate to what they believe to be better, even if they wouldn't pass a blind test between the differences. It wasn't how 900p games looked on XB1 that was the main issue in regards to power, it was that the PS4 was constantly cited as being the better performer for these same titles. People will then opt for what's consistently portrayed as the "better" device even if they never see the differences head-to-head for themselves.
Of course, this isn't to suggest that more powerful hardware is the alpha and omega of console success, as that's clearly and demonstrably not true. Had XB1 and PS4 had the same specs, PS4 would have almost certainly ran away with the generation on price. Had they been the same price, PS4 would have run away with the generation on power. Now, had they been the same price and the same power... MS likely would have held onto the markets they once had (primarily US+UK) but still been outsold globally due to brand awareness. If they had been more powerful at the same price, then they likely would have made some gains in other (non-JP) markets.
It's easy to just say "power doesn't win a console generation", but the truth is that there's no single thing that ever does, as much as those that state "software decides the winner" like to believe. For practically every example people provide of a console that won a generation whilst not being the strongest, there's pretty much also a direct competitor console where its perceived lack of power sealed its fate. The Saturn whilst similar to XB1 in regards to launch stupidity was harmed just as much by the constant citations of it not having the 3D performance to compete with the PS1. Dreamcast's momentum was shutdown almost immediately by a bunch of PS2 tech demos and claims of pushing 66m polygons, etc. A large part of why the strongest console of a generation doesn't typically win is due to factors that either put it outside of direct competition like the Wii (or potentially Switch), or because the strongest console launches into a generation that is already decided (OG Xbox/Gamecube, Xbox One X). Software is also clearly not the silver bullet that guarantees success, because Nintendo's output across every console since the N64 has by and large been the same, but to very different levels of success for their respective platforms.
