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bobobologna said:
Pretty much what I expected. When they first announced Natal, they said it would be a complete package including 2 cameras, mics, and a chip to process all the information. I thought "bullshit, no way you are going to do all that for a reasonable, marketable price."

http://www.gamesindustry.biz/articles/microsoft-drops-internal-natal-chip_1

"The load previously handled by the chip now falls on one of the main three Xenon processors, but while taking a "percentage" of performance away from the system, most games don't use up 100 per cent of the available processing power anyway."

This leads me to believe that as much as a whole processor could be tied up doing all the processing for Natal. Let's face it, it's going to be very CPU intensive, much more intensive than anything the PS Eye/Gem and Wiimote are doing.

or perhaps the rumor upgrade to the system will have new 360 use the cheaper version and older system use the more expensive one with the chip?  To many rumors I'm sliding this into rumor as well... it was a "source" that told them this after all.