I think system requirements for console games would be really stupid.

Very stupid. At that point, you might as well buy a PC. But, maybe that's what MS is hoping for. Of course, Sony isn't playing that game.

I don't see it being much different from what we currently have. Scorpio will be backwards compatible, Xbox Ones games will run on it but some will feature *Scorpio mode* where they exhibit higher settings, which take advantage of the system (Similar to Xbox One games running better on X1s or 3DS games running better on N3DS). When a game is made that won't be able to run on Xbox One and is built for Scorpio and high spec systems,they will not be marketed as Xbox One games. 

I don't think any of those are really comparable, specifically not to the Scorpio. Looking at history we can't ignore that the transition to PS4/X1 saw 2 years worth of cross platform games, that in itself is a new normal. How many GBA games were released alongside a GB Color version. How many PS2 games were released alongside a PS3 version, day and date? The industry has fundementally changed going forward and cross generational games became the norm. In the case of the Scorpio, the 4x difference in power is far more dramatic a change then any of the incremimental hardware updates Shadow1980  referenced. Practically speaking how much more powerful is the X2 going to have to justify excluiding Scorpio hardware support? Prior generations have typically been seperated by a factor of 8x or more.Even if we cut that in half, I don't see Microsoft bring out a 24TFLOP system at the turn of the decade at a $399 price point.

Yeah, I don't think we dissagree. Its an evolution more than a revolution. Although I think the difference in Sony and MS semantics is reflective of their intentions. I should have really responded to Shadow980 who's statement I was really responding to

"Also, they're not going to be part of a new normal, I don't care what some people's crystal balls are telling them. Odds are, they're going to be one-off things, likely brought about by VR and 4K, things that the the base-model PS4 & XBO (which were not as big of a jump in power as previous generations) couldn't do. Console cycles exist for very good reasons, and attempting to disrupt that could have hugely negative effects on the industry. There's no point in radical shifts in the status quo when the status quo is still healthy. Don't fix what isn't broken."

The mere existence of a mid gen update as powerful as Scorpio is in itself a disruption to the console cycle and throws into question the significane of an Xbox2 (how much more power can it offer?)....and I agree with you that Microsoft should skip Scorpio and release the Xbox1's successor/ the PS5's competitor. 

Then in that case, generations won't be a thing of the past like MS would have you believe.

A generation refresh is necessary for the marketing hype that generates renewed sales IMO.

Just like how the Playstation 4 cannot run all Playstation games like the old PS3 titles?

At-least on the PC, powerfull hardware can still run everything, even old titles... Many older PC's are still able to run new titles just fine, just with reduced quality.

I think your typical console will still have the same "life" length, there will just be more blurring of the hardware transitions by making more software forwards and backwards compatible, with more frequent hardware updates, which isn't a bad thing per-say.

With that said, I'll take a wait and see approach, I do like Microsoft's idea though if it means a more rapid advancement in technology whilst retaining a high level of compatability... I am tired of consoles holding back PC gaming and this would help fix that.

It will be dumbed down to "For Scorpio and later models only"... 

Semantics. When the Xbox One support drops there will likely be 2 Xbox Systems on the market. An Entry point (Scorpio-$299) & then a premium device (Xbox2). If generations are determined by what you see on cases then sure, cases will always need to market what platforms the games support. Until Microsoft have dozens of different consoles out all at one time, generations will of course exist, but they will not be confined to individual platforms like we see with PS1/PS2/ PS3-Xbox/Xbox 360/Xbox One.