1.) For sure... they are going to have to do some thing to deal with the influx of games that are not made for them... perhaps it's time for someone to step up and start a major website based on the more casual games with a focus on what a casual person would feel if they were looking to buy the game.
2.) They certainly open some doors...
3.) I think that Sony will stick to tried and true genres and not go much further out then they already have with games like LBP and the upcoming racing game. I think Microsoft will, by the nature of the device, be the ones doing the most innovative. New genres and taking stuff and bringing it to a whole new level... teaching games... especially things like pilates and and all the other girl workout bullshit.
4.) Zero to none... nothing they can do hardware wise will even have nearly as great an impact...
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