Microsoft has tried the hardcore thing for years and it hasn't worked, they lost billions of dollars. As soon as they launched Kinect things started to turn around for them, hardware and software was flying off the shelves and they were raking in more money than they ever have. The majority of gamers are casual gamers, they pop in Call of Duty every now and then or Kinect Adventures and that is it. Microsoft realizes that now. Doesn't mean they're going to forget about core gamers.
People need to come to grips with the fact that times are changing and people want more than just a game console. They want an all around entertainment device that does everything. This isn't the 90s anymore.