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For this generation, Microsoft have further flexibility on price, Natal and the ability to pump out a cashcow like Halo or Gears once every year.

A $149 Arcade or $199 Elite would sell very well, but it might be somewhat a case of diminished returns, since the 360 is already at a very wallet-friendly pricepoint.

Natal could shift a few million units, but it won't be a gamechanger in the same way that the Wiimote was.

Halo/Gears will continue to sell gangbusters, but will have minimal hardware impact.

Microsoft are in a very healthy position.