It would not be a killing blow to Sony and developers wouldn't like having to master a new platform either. I doubt consumers want a new system from MS anyway. If anything, launching a new system would be a damaging if not killing blow to the 360. Realistically 2011 is a safe bet for the next xbox.

I think it would be more likely to finish MS. With the current economy any new console would face a tough battle right now, particularly one that felt unnecessary.

I really don't think a 360 with a bit more memory and new graphics card would work - it would need to be new from the ground up. Also, given track record of 360 reliability I shudder at impact of suddenly slamming a bit more horsepower in the box. And to release a proper new Xbox they'd need to sink serious money into it and fast.

While diehard 360 owners would switch a lot would feel betrayed, and I doubt in the current economy devs are looking for another round of costs in learning a new system

No, for better or worse MS needs to stick with 360 for at least 2 more years IMHO. Maybe 3 if the economy stays in a trough for another 18 to 24 months.

it'd be better if they pulled a page from Nintendo and released the "Xbox 360 Slim;" basically a slim version of the 360, with all the hardware worked out where you no longer have the RROD. You could sell it at 199 and scrap the arcade version.

then get rid of the other SKU by just having elite for 300 and slim for 200. Then you could scrap the pro edition and sell them off on clearance.