Muzosi, even for Christmas 2003, Bill's point still stands. I'm sure Microsoft has done ROI models for X-BOX already, which would tell them when the next time to release a new unit would be, but several factors play into that.
Like I said earlier, I don't care how powerful the game system is - it's the games that matter. After the 16-bit Super Nintendo was launched, Atari tried to outdo them by launching the 64-bit Jaguar. Two generations ahead of the Super Nintendo, the Jaguar could have run circles around it performance wise. However, few developers actually wrote exclusive games for it, Atari was late in delivering development kits, and their marketing frankly stank. Therefore, the advanced Jaguar became a failure, while the low powered Super Nintendo became the best selling console at the time.
Therefore, Microsoft really needs to do its best to win favor with the console developers. It would also be a good idea to distance themselves from the PC arena, since few are willing to buy a console, just for the same games they can play better on a PC (higher resolution, better frame rates, etc).
Console developers are very different from PC developers. They tend to spend a long time getting used to the system specifications, and optimizing around the platform. They also tend to save their more exclusive titles until after the system develops an appreciable installed base. You won't see a Resident Evil, a Metal Gear, or a Final Fantasy on X-BOX any time soon, simply because developers like Capcom, Konami, and Square require that their super-hyped titles sell to a large enough installed base. Squaresoft, for example, expects to sell millions of their next Final Fantasy game when it launches on the Playstation 2 next year, and that's far more than most PC games sell. The Playstation 2 has already been selling for more than a year, which has given it enough time to have an installed base that Square will develop for.
Another thing about these game developers is that once they find a console they intend to put a few hit titles on, they don't like abandoning the architecture any time soon. There is a lot of investment that goes into analyzing the strengths and weaknesses of a system, and these developers won't want to have any specifications change after every game they release. On the Original Playstation, Capcom released three different Resident Evil games, and each one grossed more than the last. They even continue to sell now under Sony's "Greatest Hits" collection. If Sony had decided to change specifications on the Playstation after two years, it's likely that Capcom would have lost a lot of their investment in game design, and might not have been stayed with Sony with their next generation console.
In many ways, there are a lot of politics involved, and at all costs, the console designers will try their best to accommodate the game developers. Nintendo failed to accommodate game developers during the days of Super Nintendo. Large licensing fees, and regulations on game content caused Nintendo to lose quite a few big name developers before the Nintendo 64 launched. This allowed Nintendo to lose a lot of market share to Sony.
If Microsoft had any sense at all, they would be bending over backward to cater to these console oriented developers, instead of trying to force them around a PC-centric culture. I think I already see Microsoft doing this, which is good. Trying to change specifications on a yearly or bi-yearly basis is a bad idea, IMO, since it might alienate some developers, which would doom the system in the long run.
Trust me that the X-BOX is more than adequately powerful in terms of consoles. While PCs continually improve with new hardware, consoles improve through a better understanding and programming of the system. While PCs will always have the better looking graphics, consoles will have the ease of use and playability that will make them preferable as set top boxes. A Pentium III at 733MHz, even with only 128KB of cache, is just as fast as the 300MHz Playstation 2 "Emotion" processor, or the Nintendo 450MHz "Gekko" processor, and will enable competitive or better graphics for years to come. Changing systems will not provide a competitive advantage - it's all about the games.
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