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The console life of the X360 needs to be stretched out so they can turn a profit on the X360 console and buy time for the new project that is in development. Hold off on launch of new XBox until 2012 would be a good move. I expect 360 could have a lifespan lasting up to 7 to 8 years.

Bear in mid the original XBox was abandoned early due to it being partly produced the graphics card by Nvidia who departed ways with Microsoft.