There is room actually. MS is poised to swallow up the Wii market.
Their yoga/dance games are simpler and stylish, with lots of marketing (they hire someone in MS stores to simply play dance central all day)
They want to control the living room through the kinect, lights, in home camera, security, tv...
They have a large number of devs working on casual games.
And Wii has fallen off the casual market. Hopefully it can regain it with wiiU games like wiiU fit, etc etc, but I'm guessing MS is very confident they can pay the iron price for it.
A lot of tech is going into nextbox for seemingly casual purposes. If it actually includes a kinect, which requires system resources for things like controlling the environment, they will be sacrificing a lot of core processing power.
Don't expect the games to challenge ps4's.
This all assumes kinect is included, which is likely guaranteed. If they don't they could WiiU the kinect; ie, confuse their customers with a product that doesn't differentiate itself enough.
