Well, i think that this MS guy is fooling himself a bit. If the casual owners of the Wii never considered buying a console to begin with (typically parents, grandparents) one must think that their children at one point showed them a ps2, PS3, xbox, xbox360, and they disliked the encounter. Too many buttons i say. But the Wii? It's a different story.
The only time when a casual gamer will consider buying a core gaming console is when the casual gamer himslef turns into a core gamer. I seriously doubt that casuals actually look for such things as uber amazing graphics.
Deep into the darkness pearing
Long i stood there
Wondering
Fearing
Doubting.