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Every console maker begins work on or around the time of the launch of the current machine--that's just how the industry works. And everything we've just read today on the "Xbox720" will likely be changed by the time the actual new machine comes out. Hopefully not as soon as 2010, or MS might as well go ahead and shoot themselves in both feet and stick the Xbox division in the grave from the get-go. Granted, 2010 is 5 years after the Xbox360, but with the immensley high cost of development these days, it'll likely bee too soon for the majority of developers especially when Nintendo and Sony have stated that they intend for their machines to last quite a bit longer than that.

Microsoft could jump out early enough to hurt themselves the way Sega did with the Saturn (and to an extent, the Dreamcast).