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I'm sure that if they wanted to, they could make the 360 smaller and they definitely could've made the original Xbox smaller.

Redesigning isn't only for the purposes of increasing sales. Making things smaller also makes the cost of making the console less, and so they could afford to make more price cuts.

So why do you guys think Microsoft never bothers to make things smaller? Is it that the 360's components just can't be reduced in size anymore?