I was  just wondering about this because MS is relying heavily on Natal whereas, Sony treats the wand like a side quest. I personally think the next step would be a new Xbox that would be superior to the PS3 with a bluray player and more features. ( I doubt it would be called xbox 720) .

  So for this generation, apart from Natal, what else do you think MS could have up their sleeves?

Then they focus on the next xbox which is all but confirmed to come out in 2012

Price Drop? You have to remember 360 can always be cheaper than PS3.

Well, that's true but the ps3 doesn't seem that much more expensive anymore to  the public, considering additional features. MS can't always drop the price because the Xbox needs to make money on its own. It's a separate entity from MS computer software

I think the assumption, that MS is relying on Natal to do more for the 360, than Sony is relying on their motion controller, to be flawed.  Both want their new controllers to succeed and both with support it the best they can.

I also find it interesting that close to a year out of it's release, you want to discuss what happens if Natal fails.

Finally, I find it interesting that Sony, who has been operating in the red, can afford a complete redesign and $200 price cut, but MS can't drop the price because they have to stay profitable.

I guess, in short, there is an AWFUL lot of pessimism towards MS in this thread, and it's only like what, 8 posts long?

@blackops

MS can drop the price really low, because they still have Xbox live and all the accessories. Also they can market free XBL or start packing in WiFi. Then the value will be the same.

If Natal fails I'm pretty, depending on MS positioning at that time, that they will either start work on 720, or they will just ride out the rest of the generation on the backs of their current sales.

Xbox 360 has done enough already to be called a success. If Natal is successful, then it will reach new heights for an MS console. But as it stands they have nothing to lose if it fails.

Well, PS3 got cheaper due to reduction in production costs and Natal seems like it's gonna cost more than the wand because it looks more promising, therefore , MS will be spending more on R & D than Sony.

And what I said about MS about staying profitable means they can only drop the price for so long. Both Sony and MS  lose money on the consoles. If Sony decides to sell the ps3 for $ 150 then the same will go for them

I could be wrong but I believe that Natal is a key piece of Microsoft's next generation strategy and a clear rejection of it by the market would be very damaging to Microsoft ...

Whether people are ready to believe it or not, Microsoft is probably talking to third party publishers about their next generation console already because it will take them years to plan and develop software to be ready for launch; and it isn't likely that Microsoft would wait much past Christmas 2011 or 2012 to release their next system. It is likely that Microsoft is already talking about how the Natal will work on both the XBox 360 and their next generation platform, and trying to sell it as a viable platform to capture a broader audience of gamers. If Natal fails, not only will it hurt Microsoft's relationship with XBox 360 developers who choose to take advantage of it, it will also hurt their relationship with their closest developers because they will be gambling on both the small userbase of a launch system and the demand of Natal.

If Natal fails, it's a pretty safe bet that an earlier launch than some suspect right now for the 720 is next in the cards for MS's console plans.