Let’s approach this with caution. According to MS Nerd, a source quite insightful on the inner workings of Microsoft, posted some interesting info on the next Xbox.
According to his blog, it will run on Windows 9, be cheaper and far smaller than the current generation Xbox, in an effort to boost the Kinect’s adoption by consumers.
“With a heady mix of rumors, tips and speculation, I am now stating that Xbox codename “loop” (the erstwhile XboxTV) will indeed debut a modified Win9 core. It will use a Zune HD-like hardware platform—a “main” processor with multiple dedicated assistive cores for graphics, AI, physics, sound, networking, encryption and sensors.
It will be designed by Microsoft and two partners based on the ARM architecture. It will be cheaper than the 360, further enabling Kinect adoption. And it will be far smaller than it’s predecessor. It will also demonstrate how Windows Phone could possible implement Win9’s dev platform on the lower end.”
I could see that happening. It makes sense for Microsoft not to let go of Kinect, a hardware so firmly implemented already. If it is indeed even cheaper than the current pretty low price, that could cause trouble for the PS3. Sony better be careful. There is nothing about the media that will carry the games, though. I can’t see Microsoft going the Blu Ray route.