I would also like to add that you did not fully include the entire quote that you referenced earlier, so I will do it for you.
http://www.gamesindustry.biz/articles/microsoft-hardcore-games-easiest-to-sell
"It's a continuation of a strategy we've been articulating for a long time, which is that we have a powerful piece of hardware that enables a lot of different experiences," he added. "Let's start with the core users to really get their attention and get them invested and committed to us as a platform. Then as we look to broaden to new audiences, we have the hardware capacity and technology innovation to continue to evolve the experience, whether that's by bringing things like Facebook, Netflix and Twitter to give people more reasons to turn the console on, or with Natal in the future, with a more social, casual and interactive controller-free gaming experience that something like Natal brings."
So to clarify what they are saying, they started by targeting the core gamer at the start of the 360 life cycle to get a foot hold and now they are broadening that experience to new audiences via Facebook, Netflix, Twitter, and now Natal.
