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The 360 hardware isn't even close to be tapped out at this point. Almost all games (perhaps all games?) on the 360 are using only 1 of the 3 CPU cores. Yes, this doesn't mean only 1/3 of the potential of the CPU is tapped, but someone willing to do heavy lifting with a game that uses all 3 cores could still do some amazing things. Remember, making leaves on the tree move in independent directions, casting realistic shadows, etc., are very CPU front loaded... the GPU just renders the result.