Hmm...I believe they are taking this inference to far. They are launching the Natal as a new experience for the current 360. They might be bundling it with a new slim 360, but I doubt the hardware specs for the console are going to be changed. This could possibly cause a headache for developers and seems like an all around bad idea to me.

If this turns out to be true, this is likely the push I was waiting for to jump onto Xbox bandwagon.

I've already own Wii & PS3, and decent PC. Though 360 seems to have its own interesting line-ups, not quite to the point I was willing spend extra $200-300. Especially when I already have Motion Game Console & Supposedly most technologically advanced console.

But with Natal, I felt like 360 is getting more unique and interesting. Natal > Wii in the motion technology-wise.

With additional hardware upgrade on 360, the difference between PS3 and 360, which appears saddle, may change their relationship i.e. New 360 full power > PS3 Or at least equal to that of PS3. If they becomes equal, then 360 is the winner in this regard as 360 is much easier to develop for software companies.

So in conclusion, 360 to me sounds like going to become the best of the best console on the market if they really do what 1 up says to do. And indeed this may be the last push MS need to make their console a primary choice of the console. Well, at least I will be convinced to say 360 is my choice!

Oh and it's really clever for them to do this rather than releasing brand new console from scratch. A. less R&D. B. Current owners of 360 is less affected. C. Yet, MS is providing option & way to allow developers to match up with PS3 potential power OR even exile it.

This is an interesting idea. Basically, advance the generation without actually officially moving to a next gen console. This is an interesting balance of both sides of the argument, but the question is, would developers make games exclusively for the "new 360"?

I like the idea of Natal coming with every single console (next generation). The service need to have 100% accessibility for every developer to take advantage of it. If it were only sold as a peripheral, it would be another Super Scope, Power Pad, E-Reader. By adding it to the next console, it could be the next Wii-Remote.

You crack me up...

OT: I agree with JaggedSac.  This would just create a nightmare for developers.  Now they would have to build the normal version, plus an enhanced version with better assets.

if any "console" is released it will likely be a smaller 360.

that's not the case for example:

take the PSP 1000 only has 32 MB of ram, all new PSP's now have 64MB of ram+ skype

take the new DSi (2) digital cam's added to the DS

even if they upgrade the hardware the developer's can and would most likly take advantage of the upgrade.

loldirtsheets

Well, this is interesting. You basically have Nintendo and Microsoft competing for the casuals while Sony will remain the one true console dedicated to core gamers. So, if you want body flopping controllers you'll be getting a Wii or 360, but if you want the best and most traditional games, then the PS3 will become your console of choice.

Please, please don't. Don't go down this road.