There's no reason to believe that Microsoft will again "raise the bar" in the HD console race with the next generation. Why should they burn a lot of money on a demographic which is clearly not their target?
Microsoft's XBox is a defensive measure, against "invasion" in the home, against the Windows-based PC, from the livingroom. MS can't have browser-based office products being run from consoles which never required Microsoft's OS in the first place, now can they? MS couldn't care less whether or not they capture the hearts of the 13-25 male demographic, now that its been proven (via the Wii) that the real contender for livingroom dominance has less to do with shooting games, and much more to do with casual/Everyone games.
I think the "next" XBox will BE the X360, albeit in a new package, and with a new controller. The PS3 will be able to sustain itself against such competition in much the same manner. "10-year plan" -- Sony and MS have both said it, and they are serious.
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