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The X-Mote/Newton controller really can't be that much of a threat because the XBox 360 has already been outsold by the Wii, the device will be an add-on that will (probably) be poorly supported by third party publishers, and by the time XBox 360 developers are taking advantage of it on the level the Wiimote is currently being taken advantage of Nintendo will be on a whole new plane ...

In other words, unless Microsoft wants to be embarrassed they should hold off until the next generation.