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Demotruk said:

However the vast majority of the market for video games have a medium range PC at best. An XBox does differentiate itself from these, and it differentiates itself from a high end PC by cost and relative simplicity. A Natal XBox would differentiate istelf from medium/low range PC's moreso.

 

The key thing that's missing here though, is the fact that Microsoft will always want to keep the PC and XBox platforms as close as possible, in order to keep developers on the PC.

A medium range PC is a viable gaming platform.  You don't need best of the best to run PC games.  I think it's a huge misconception to imagine to imagine every PC gamer as having a fully tricked out PC running max specs on everything in sight.  You don't need that and I bet (no solid proof) most "PC Gamers" don't even have that. 

Your "key thing" is a wash as well because you're looking at it from the wrong angle.  The question isn't why keep them close, the question is why would you split them apart?  Think about it for a minute.  If you already have an infrastructure in place for the PC and an api that works then why would you do something completely different for your console?  Obviously, if developers can make crossplatform 360/PC games then that's more opportunity for profit for them and for you as well.  If you have one standard API then it makes development everywhere much easier which saves cost on both platforms.  Also the more you can tie together, the fewer versions of things you have to maintain as a provider.  Time saved on maintenance can be used to enhance it.