Even though Microsoft EDD competes with Nintendo and Sony as their major competitors the actual division is designed foremost as an Apple competitor given most of the product lines it operates with such as phones, tablets, surface and Live are designed to compete against Apple (hopefully for them). So if this is the case then it stands to reason that an Xbox console present or in the future will be made in order to compete with many of the values Apple has used to great success in the C.E. arena.

What this may mean is that the Xbox next console may not be designed to be future proofed and standalone like the Xbox 360, they may simply decide to release a console with hardware which is good-enough for say 2012 in 2012 and then come out with a revision in 2014 to fill in capabilities which the present hardware is lacking. For instance the hardware in say 2012 may be great for regular 2D rendering but it may suck for 3D stereoscopic rendering, a revision comes along to fix it in a few years so long as thats where the market is heading. Thats just one example, there are many other possibilities which may crop up between inception and delivery of that device which they cannot foresee happening by 2014 and beyond. This is where an Apple like revision cycle comes in handy.

They won't likely want to release hardware which is too expensive with minimal margins. This means a next generation console probably won't be a massive performance powerhouse right off the bat due to power and cost constrains. In that respect they'll probably be making a high profit margin on every box and in that context having to sell another box to someone because they want the new features is a bonus and not a curse. One of their biggest strengths as a company is backwards and forewards compatibility. If someone can upgrade from Windows 1.0 to WIndows 7 sequentially through versions and still run software installed in Windows 1.0 they can figure out how to get consoles with different hardware specs to play nicely with the same software. If this is the case then the idea of fixed console hardware may be about to come to an end for at least one manufacturer.

They know how to make money, they know how to extract money from those most willing to shell out. They know psychology and human nature and they have been very good with price discrimination (Arcades/Premium/Elite). They have been good at extracting value on a service (Live Gold) to the point where they can even increase the price of that service. With their recent hirings I haven't interpretted it as meaning they are ramping up to just make a console, they are in my mind ramping up to not only release a console but additional hardware revisions soon afterwards. Why wouldn't they? They release the Xbox 360 S and not only do they gather higher margins per console but they also get much greater sales which probably more than paid back their development costs with much left over for outright bottom line profit. This isn't really anything to get up in arms about, all the companies make it their mission to sell you more stuff even if you don't need it or even if it's bad for you.

If EDD is the Microsoft equivalent of Apple as a division and the Xbox 360 has already been run with Apple like values between Kinect, Xbox 360 S, Live and Live Gold, then why would they not act even more like Apple in the next hardware cycle? They already mentioned several key words such as 'forwards compatibility' and they even suggested a '4 year hardware cycle' for the 360 early in the generation which ironically the Xbox 360 S may have been the design intended for a next generation console had RROD not come around. The fluidity of this hardware generation in terms of how the consoles have evolved in both software and hardware isn't exactly a resounding counter-punch to the idea of having a more flexible console which evolves all hardware with time and not just peripherally.

Sega... that is all..

Sega wasn't a multibillion dollar company which is number 1: in PC operating systems and may end up being number 2/3 smartphone OS manufacturer with vast sway over both the consumer industry and the semiconductor industry.

Sega/Microsoft

Apples/Oranges

What about the devolopers, Apple games and Console games are very different. Some games takes years to make.

neh I meant time after time sega proved that consumers don't like that after a time they can't play the same games on their machines.. in sega case with hardware addons.. Genesis + Sega CD + 32x and Saturn + 4MB cartridge + FMV cartridge..

A phone cycle is 2 years.. I can see many angry mothers for buying a new console every 2 years case dear johnny wants to play Gears of War Triple Xtreme.. on the iPhone you can't play all the new games on the original iPhone.. but you can make calls and it still texts which is it's core function..

having people upgrade to keep using the core function wont work..

i kind of agree with this but at the same time i kinda agree with squilliam.  there are a lot of people that just haaave to have the newest whatever while many others don't.

the thing that apple does is add a bunch of marginal additions to the casual consumer that the hardcore consumer has to have.  3G, more hardware space, video, ect.

not that there aren't new users buying the slim versions of the ps360 but i think there are also a lot of upgraders.

if they can find a sweetspot between maintaining a core functionality while continually adding key additions there could really milk the consumer for all they are worth. xD

kind of like the DS -> DS lite -> DSi -> DSi XL -> 3DS ...

edit: before i get accused of trolling; i included the 3DS because it is fully BC yet pushing the lifecycle forward much like the iphone XX to the iphone 4 did.

Why would you assume that core functionality would be compromised on a design which is made by the masters of backwards and forewards compatibility? Saying Microsoft couldn't do it is like saying Nintendo can't release another 10M plus selling unique I.P.

I didn't even finish reading.... this is outrageous..... apple is running the biggest tech scheme of the century..... and it will not last.... I don't understand how people still think that the rotten apple is going anywhere because they see a bunch of trend victims buying their overpriced devices.... those people are still a minority and apple is a threat for nobody..... even windows 7 has more market share than OS X... android completely blew iOS out of the water in less than a year.... and symbian is still leading the market......

apple is a trend joke... that has no real power and no real value.... XB will go open source before it follows any business model from apple.... being profitable with less than 10% market share is not a prowess it's the strict minimum to still exist.....

that said even with apple out of the picture the idea doesn't make sense in the gaming industry period.... when it comes to gaming you have to take in consideration the third parties making the games.... if they decide to do that bye bye support for great games.... and don't get me started on the ecological side of the debate....this is blasphemy....

that said microsoft is there to position themselves as the multimedia powerhouse running your house to counter giants like sony, google, etc... they want to be present where you and your family spend time and connect it all together in the near future.... apple is nowhere close to that compare to other MS competitors....

What does the "masters" of backwards and forewards compatibility have to do when Epic chooses not to support Xbox2011 and 2012, but only Xbox2013 and forward.. they did with the iPhone..

You're making up a straw-man argument here... seriously!

Epic will almost certainly support the Xbox next at launch and competitive pressure from other engines will force them to continue to support the Xbox next refreshes. Epic continues to support the iPad 2.0, will support the iPad 3.0 and the iPhone 4.0 as well. They said they waited for a certain level of performance before they supported Apple with UE3.0, that support was made with the implicit knowledge that Apple would make yearly hardware revisions.