I don't think it has been confirmed that Xbox 720 will have an 8-core AMD CPU though. It could be an 8-core PowerPC architecture CPU. It's actually very expensive and difficult to code games for multi-core processors. Game code itself does not land itself well to scale easily across 8 separate cores. In the real world a 4-core 4.0ghz CPU would outperform the exact same CPU architecture that's 8-cores at 2.0ghz in games because most 3rd party developers will not spend extra 6-12 months and millions of dollars to optimize for all 8 cores fully. Do you realize how much harder it is to create an 8-way parallel game code? Why do you think developers complained so much about coding for the Cell and its 6 supporting SPE engines? It was easier to code for the 360 since it had just 3 cores. Since it's too time consuming and costly to optimize for more CPU cores, this also explains why cross-platform 3rd party games look and run better on the 360 than PS3 for the most part. 

Chances are MS can't afford to get the FX8320-8350 due to its higher price, TDP limitations and because they want hardware BC. For these reasons, imo they are more likely to go with IBM's cheaper 8-core CPU. They might prefer more slower cores for lower power consumption, cheaper price of IBM CPUs and to have some of those cores dedicated to run Kinect 2.0. Since Sony does not have Kinect, for their console a fast 4-core CPU could be preferable and could easily end up faster for games because one-on-one a single AMD core would level an IBM core in IPC. 

In reality, both the CPUs in Xbox 360 and PS3 were slow and overhyped. This is why in situations like Blighttown in Dark Souls, it's a chug-fest. A 2.4ghz 8-core IBM CPU doesn't sound powerful at all actually considering that IBM has had to quit making consumer CPUs because they were so much more inferior to AMD/Intel's in performance and performance/watt.Metro 2033 developer said that a single Core i7 (1st gen) is more powerful than the entire 3-core 6 threaded Xenon CPU in the 360, you can't just assume that an 8-core IBM CPU in the Xbox 720 is some super-powerful CPU. If those IBM cores are closely related to Wii U's CPU, then 2 of such 1.6-2.4ghz cores could only be as fast as a single 2.4ghz AMD/Intel core. Suddenly, an 8-core 2.4ghz IBM CPU wouldn't look so hot against a 4-4.4ghz 4-core AMD one. 

If PS4 uses Richland A10-6800K clocked at 4.0ghz or so, a 2.4ghz 8-core IBM CPU will result in 8 average speed low clocked cores going against PS4's 4 faster cores -- then we'll have a complete reversal of PS3 vs. 360 situation where games would be way easier to port from PC to PS4 and because it's way easier to optimize for few faster cores, they will run faster, contribute to shorter development times and lower costs for developers:

http://www.tomshardware.com/news/amd-richland-28nm-a10-6800k,20272.html

People keep wanting PS4 to have BC, but if Sony actually goes for an x86 CPU, MS's bet on 8 weak IBM cores could become a disadvantage. MOAR cores strategy hurt PS3 more than it helped:

http://kotaku.com/5889410/playstation-4-ditching-the-cell-processor-sources-say-which-leads-to-some-wild-theories

I can't see Microsoft using IBM this time... for me both consoles will use AMD for CPU and GPU.

But well we have to wait .

How will they maintain BC then if they go x86 CPU? 

True to some extent but console gamers never compare apples-to-apples. If you took a 6 year old GPU or a GPU with performance roughly equivalent to Xbox 360's "X1800XT" or PS3's "7950GT" and lowered everything to DX9, all settings to LOW and resolution all the way to Xbox 360/PS3 level you can run Far Cry 3 at the same crappy performance level of Xbox 360 / PS3, i.e., 22-30 fps. 

Far Cry 3 on a 610M on the PC:

http://www.youtube.com/watch?v=843Uio0fG6c

GT610 is barely faster than the GPUs in Xbox 360 and PS3.

http://alienbabeltech.com/abt/viewtopic.php?p=41174

GT610/610M only has 48 CUDA cores vs. 1536 of GTX680 and it runs Far Cry 3 with the same level of crappy graphics as a Gen7 console would. If you want the same performance and graphics as Xbox 360/PS3, you can get that on a $50 GPU. When most people play PC games, the LCD monitor is positioned very closely to their field of vision. If you came up to your living room TV and looked at the graphics of Uncharted 3 or Halo 4 one foot away from the monitor, the image is pixelated and blurry. Because console gamers often game 6-10 feet away from their living room TV, the lower resolution, terrible textures  are more forgiving than if you were to play at the same settings on a 24-30 inch PC monitor.

Xbox is Intel x86... 360 is IBM PPC... they have BC... that's the same scenario.

The Microsoft BC is not get your old dics an play it on the new system... there is a new version recompiled to the new system and it's not all games work.

They have limited bc and each game has a special emulator - it is not "recompiled". The reason they could do it was that x360 was very powerful and ms put a lot of effort in the emulator. Emulating the x360 is off, I think. To emulate THREE cores with 3,2 Ghz, even with 8 x86-cores, won't be possible. Let's try it: 8 cores with nextbox. At *least* you need 2 cores to emulate *one* ppc-core which will still be almost certainly extremely slow as the cores are meant to clock a lot lower. Then emulating instructions on another architecture is not "1 instruction here,1 instuction there": you need several cycles on the target machine to emulate on instruction from the source. So even *if* 2 new cores can by magic emulate the 3 cores, you have no gpu-emulation, no "logic"-emulation meaning synchronizing all parts of the system together, no input-emulation and so on. Won't happen, if you ask me :) But if you can argue why it could still be possible (and please not only "they did it before", that's not an argument) then post it.

I still believe they will stay at ppc and i don't know why they shouldn't or couldn't.

On the bright side X86 compatibility will give them perfect Xb1 backwards compatibility.

I came across this info on another forum

"Black Tusk Studios (working on a new AAA core ip franchise)http://www.eurogamer.net/articles/2012-11-29-new-dev-black-tusk-studios-working-on-microsofts-next-big-entertainment-franchise

Microsoft Studios Victoria (another new core AAA studio)http://www.youtube.com/watch?v=xt56feJEpqM

Rare is expanding a new AAA core studio and hiring for developers with experience in Action/Adventure and FPS genres http://www.eurogamer.net/articles/2012-05-17-rare-hiring-for-multiple-aaa-future-console-releases

MS has built a Core studio in Redmond that has top talent:
Alex Liu- former Naughty Dog Game Designer on Uncharted 3 and worked on The Last of Us
http://www.linkedin.com/pub/alex-liu/2b/1a9/14
Don Norbury- former Irrational Games AI Lead on Bioshock Infinite http://www.linkedin.com/in/donnorbury?trk=pub-pbmap
Clint Bundrick- former Irrational Games Combat Design Director and Principal Combat Designer on Bioshock Infinite http://www.linkedin.com/in/clintbundrick?trk=pub-pbmap
Joseph Faulstick-former Irrational Games Producer on Bioshock Infinite and Bioshock1http://www.linkedin.com/pub/joseph-faulstick/4/42a/702?trk=pub-pbmap
Ian Vogel-former Irrational Games Senior Designer on Bioshock 1 and Game Designer on System Shock 2 http://www.linkedin.com/in/ivogel
John Howard-former Halo Combat Evolved Lead Designer

Lionhead is working on a new ip http://www.eurogamer.net/articles/2012-05-16-lionhead-making-mmo-like-new-ip-for-next-xbox-report

Ryse is a new ip from Crytek
Alan Wake 2 is rumored to be a Xbox 720 launch title
Bungie's new ip Destiney rumored as the Xbox 720 flagship launch title"

More speculation

Urian, the guy of the spanish blog, suggest that next xbox will use a two SoC/APU, one of those for rendering the current frame and the another one for post-processing. He is speculating based on current known patents but it looks similar to this from semiaccurate forum:

Quote: 8 upgraded jaguar cores 8gb ram 8000 series gpu with specs that of a 7770 ghz edition esram hefty pseudo gpu (unlike anything that we'll seen before) that assists the main gpu, marketing flops and documents don't include the numbers for part yet. general purpose dsp that can be used for audio or graphics Durango GPU is basically a gcn2 7770 ghz edition with esram. 1.2 teraflops. There is also some extra stuff in the box that makes it perform like a 3tf card in the real world.

http://www.neogaf.com/forum/showpost.php?p=46398780&postcount=2197

Ignore anything about 1.2TF,especially that 1.2TF magically can on par with 3TF rumors