The idea is that you can use the xbox360 design for a number of OTHER applications
Bluray decoder
Control system
Video on demand system
whatever someone else can imagine
This lets developers come up with their own solutions and if they want also employ the XBOX360 games machine, MS wins by getting a licence fee to recoup dev dollars, they win because the machine is available in a number of different configuration and through a number of different sales channels, and they win because higher sales drives the price of key components down.
I don’t think this is an unlikely rumour as they have said it publicly already.
Predictions JAN 08
2008 PS3-19.5M(actual 19.5) XBOX360-23M(actual 27.5) Wii - 37M(actual 45.8M)
End of 2009 PS3-27 25M XBOX360-30 35M Wii - 48 63M (revised DEC 08)
Price Point
Mid 2008 Wii $250 Xbox360$249 Xbox360(HDD)$299 PS3 $399
Mid 2009 Wii $189 Xbox360$199 Xbox360(HDD)$249 PS3 $339
Mid 2010 Wii $ 149 Xbox360$159 Xbox360(HDD)$199 PS3 $289