The PS3 has a 2* BRD. A new console could have a 6 or 8 speed drive. This means they wouldn't need a HDD which is immediately a $30 cost savings even accounting for a more expensive drive initially.

Do you think it possible that if not will not be successful, Microsoft will get out of the console race?

No. They will try again next gen.

They said they see it as something that will give the Xbox 360 another 5 years in the market and will continue in the next generation of consoles with their next console

Let say Natal fails, what do you think they will do? how will they keep selling the Xbox 360? The sales now are obviously great, but how could they keep them? can the Xbox 360 really live beyond it 5th year?

Yes, if natal sales fail, the 360 sales will not dip much lower than now over the next few years.

If the Xbox 360 sales starts falling down, do you think they'll just launch their next console to get the advantage like they did in this generation?

I have mixed feeling about this, I just bought my first 360 after being able to use my brothers for two years. So I really would like to have this gen last a little longer so there are more games for the 360, on the flip side, I would love to see what the next console will be.

Most importantly - What will they do if Sony's next console is successful like the PS2 as opposed to the first Xbox? Will they keep their console alive until the generation after? Is Xbox and Microsoft Games Studios really that important to Microsoft from a financial standpoint to the point where if it fails so hard like the first 2 years of the PS3, they will still keep it?

Who cares, as long as they make a profit I think they will stick with it and try again next gen. MS looks at the long term as well as the short, they are very business savy.  

First of all, Microsoft's "plan" didn't work. Sony's fall from grace in the video game market is due solely to their own tremendous gaffe's, the most noticeable one being that they released a ridiculously over-engineered $600 dollar console. It was nothing that Microsoft did. Even then, the margin by which they have outsold the PS3 is negligable, especially when you consider that the difference in sales right now is virtually equal to the amount of 360s that had been sold when then the PS3 was launched. That being said, both platforms have moved about the same amount of hardware in the same period of time even though the PS3 has been more expensive with a smaller game library for most of its lifespan.

The Xbox 360 may have sold more than the OG Xbox, but that's not really saying much when the latter only sold 24 million units last gen. MS really had nowhere to go but up. They'd have had to make some mistakes on par with 90's Sega to actually sell less. MS is in the exact same position it was in last generation, which is a distant second place with an insignificant lead over the third place competitor. If the 360 were really doing so great, then why is it that the only system it's managed to outsell all generation is the PS3? Sure, it looks good as long as you ignore the face that it's taking the exact same beating from Nintendo and just focus on the last-place console.

As far as Natal goes, there are going to be a lot of dissapointed people on these forums. First of all, no controller add-on that was released several years into a generation/console's lifespan has ever had any kind of significant effect, and Natal wont' be any different. First of all, it won't have a 100% attach rate, which means that third parties aren't going to pay much attention to it, which goes without saying considering that nearly all of the Wii's most popular games are in-house titles, and MS's in-house talent is really nothing to write home about. Another thing that people don't seem to get is that the reason for Nintendo's success this gen with the DS stylus & touchscreen and the Wii's Wiimote & Nunchuk is software that appeals to everyone, something MS has yet to achieve. Every title like this that MS has attempted(Lips, Scene It, Kameo, Viva Pinata, Banjo & Kazooie) has been an unimitigated failure on all fronts. Very few people will care about it because the demographic that it's meant to target has already been snatched up by the Wii and its more appealing software, and Natal will just be soon as a weaker version of the Wiimote. Really, had Nintendo released the Wiimote as an add-on for the Gamecube in 2004, would it have made any kind of a difference?

While Natal's imminent failure may not cause MS to exit the home console business, I wouldn't be surprised at all if it did in fact tarnish the Xbox brand.

The PS3 has a 2* BRD. A new console could have a 6 or 8 speed drive. This means they wouldn't need a HDD which is immediately a $30 cost savings even accounting for a more expensive drive initially.

A future console without a hard disk drive? I see no way this could happen, disk caching is just one of dozens of reasons for having lots of storage space. I'm sure even Microsoft will learn from its mistakes and will never again release a console like the 360 Arcade.