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Landguy said:

Aren't they both basically using x86?

That's incorrect ... 

The Xbox 360's CPU is based off of one of the Power architecture family. 

The funniest thing here is people are so quick here as to point out the culprit being both of the consoles CPU being x86 as an excuse to not expect a lot of improvements overtime when people here should really be focusing on both of the console's GPU and it's ISA to really see the difference. After all, why pay attention to a component that does less than 10% of a game's workload ?

The GPU's in both consoles offer sooo many more things compared to last generation that it's not even funny. You get programmable vertex pulling which takes GPU independent rendering to the next level so that in turn dramatically reduces CPU dependence on rendering, more fixed function operations being handled in shaders which gives developers more freedom in how they program shaders, tessellation units, cache coherence for L2 cache, and they're even capable of doing a true function call too!