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TheSource said:

I really don't believe this at all.

It is going to help the Xbox 360, but there will probably be more titles for the PS3 motion tech already, and there will certaintly be more Wii motion tech titles available.

They should be positioning the 360 Natal pairing as cheap, uber-easy to use HD motion tech gaming. But its not going to be the equivalent of a new launch.

In MS's press conference, they intimated that this was the case: launching Natal would be like a re-launch of the 360 as a new console, without having to buy all new hardware.  Whether they are succesful or not, obviously remains to be seen.

As far as cheap/easy to use, I'd disagree/agree with you; MS is NOT positioning NATAL as a cheap, technology.  Nothing they have said or insinuated would lead me to believe that they expect to sell it as a cheap alternative to other technology.  In fact, I'd argue that they are trying to position it as the cutting edge technology (which is never cheap).   I do agree however that easy to use is one of their selling points.

On topic, I'd expect NATAL to be MS's reason for their "10 year plan", to milk this generation for all it's worth.  The original XBOX was MS's loss leader to get them a foot in the market, I'd venture to guess that they are now looking at extending the life of the 360 as long as possible in order to recoup as much of their investment in this arena as possible.