The HD consoles domination is set to start since the beginning of the gen.

Meanwhile the Wii almost outsells them both.

Gotta love fanboyism :)

And this is exactly why it seems pretty reasonable that MS would want to sell Natal for the price of a controller, even it means taking a loss on each peripheral sold. I think everyone who insists it will cost $100, much less $200 (claims made after last year's E3) is simply trying to drum up reasons why nobody will buy Natal.

One would hope MS is going to try and sell Natal games rather than Natal cameras to Xbox owners who will stop using them if no interesting Natal software is continually released.

In the case of Natal, they're not trying to sell cameras to previous Xbox owners so much as they're trying to broaden the Xbox market and sell more consoles, even if it means giving the camera away with consoles.

The decision to remove the independent processor from the camera as a cost cutting measure should have been a big clue.

As for the HDD pricing, that is something MS might want to re-evaluate if they really want to push DD and DL content as a major part of the Xbox experience, even if it means nothing more than giving the consumer "more" at the same retail price (ie. 250 GB HDD for the previous price of a 120 GB HDD, which would be discontinued). It's not unreasonable seeing as how they already did this with the Elite last year (swapped the 60 GB HDD with a 120 GB HDD, dropped the HDMI cable, kept the case black and called it a $100 discounted Elite).

Xbox Phoenix? Wtf? Have i missed some kind of rumor? :D They better not go with Phoenix.. sounds retarded.

Well i can actually make a better guess than you. MSFT, like any business, wants to get customers committed, then jack up prices for things they know are desirable and even sometimes a necessity and once said consumer is already committed with 3-400 bucks in games, periphs, hey, whats another $150 if ive already spent this much?

I agree they will probably lower the price of natal and take a loss, but im confident there will be something added onto natal that will be sold seperately only through MSFT that will bring its actual cost a wee bit higher.

Well, what can we say? If we happily ignore Wii and if we gleefully bash PS3 even when it's starting doing well and if we deny that costs reduction happens, starting from a higher initial value, obviously, at the same % pace as the others (and even faster for new optical devices that suffered from high prices and shortages of blue lasers at the beginning, being quite a novel tech), and if we finally deny that even the third ranking console becomes appealing for most games developers when installed base exceeds 30M, then yes, XB360 rules and will rule forever.

Sadly for MS reality is quite different, it can thank Sony's initial clumsiness and overconfidence, PS3 excessive price, initial blue laser shortages forcing a scattered world launch with a EU delayed to Easter launch much smaller than it could have been on the previous Xmas, if it still keeps its 2nd WW and USA place, but it totally wasted its lead letting Wii surpass XB360 in a few months.

Oh well, this doesn't even matter, Wii rules almost all casual and the whole nintendocentric hardcore, and always will do for the rest of its life, but as this gen grows older, PC will rule more and more the not-nintendocentric hardcore segment, 2010 and part of 2011 will see the peak for HD consoles, then PC will be back on top, it's always the same pattern each gen.
As PC means Windows, MS could be in theory happy anyway, but as long as 32bit lives, most PC gamers will prefer the old XP for its lower resources consumption, good stability reached and smaller amount of quirks, damaging newer Windows version sales, as Vista's relative flop teaches us.
Not to mention that MS grabs royalties on XB360 games, but not on Windows ones, unless they use licensed MS tech.