I am being very careful with what I say here for obvious reasons.
Xbox 3 / 720 / Durango is in disarray.
Microsoft were taken completely by surprise by the power of PS4 and the elegance of the design. Their relationship with AMD is also under extreme duress as they feel AMD have given Sony preferential hardware development support (the truth is that Sony's own engineers supported the process)
Durango was engineered to be 'affordable' not just for the end consumer, but for MS to break even on day one - while including kinect in the box with every system. The apparent complexity of the hardware diagrams is due to lots of choices that are designed to make up for the components used. Microsoft assumed Sony would create a system based on low end hardware and arrogantly (that word aptly describes the exec team following the success of kinect - they think they are strategically untouchable) assumed they would have the same difficulties internally as last gen. To see the ducks in a row is disturbing. Microsoft are very much aware that World Wide Studios represents a force to be reckoned with now Sony has sorted out the cross regional culture.
Developers can't write to the metal on the system, but rather have to use an API - the reason for this is MS are planning regular Apple-style revisions. They have calculated that having lower performance on day one wont matter if over several years they can upgrade the system. A second calculation is that both console's first games will not fully tap into the power of the system. That means that by the time PS4 is hitting its stride, MS will have a new revision on the market. DO NOT EXPECT TO HEAR A WHISPER OF THAT AT LAUNCH. They know people might wait.
It is not all bad news though. The reason they weren't at GDC is that they don't want any leaks and did not want to disclose much more than they already have. They have had very positive focus group tests for their plans with both gamers and casual type customers. There is one problem with that. The comments do not take into account how those same people will react after seeing Durango games next to PlayStaion 4.
That said EVERYTHING is running late, there's heating issues and the system OS (which is built around windows 8 to eventually allow unified apps across Xbox, Winphone and PC), isn't ready.
The system is indeed 'coming in hot' in more ways than one.
Developers are frustrated with the complexity of the memory set up and an apparent change in focus by MS (Xbox was their trogan horse to beat Sony in the living room, now they are more concerned about google and Apple).
To confirm / deny rumours:
Must have kinect to work (true, kinect is integrated across the system, but hand tracking means it can offer a touch screen-like experience on your TV)
Always online. (false, the system is ALWAYS CONNECTED, just like PS4 it does a lot of stuff in the background - if you don't connect to the net you can play game but the console isn't worthwhile - a lot of the experience will be about being connected)
Tiered pricing and subscription based subsidy (True)
The system will now come with 12GB of GDDR3 memory (True - this won't make a huge difference to performance in the short term, but it is cheap and gives microsoft one of the few areas where Durango can claim a victory of sorts. The logic is that the average joe will believe more memory is better. Why not? The PC market has been teaching him this for years)
Anti Used Games. (True. They have a system and it works. Time will tell if they decide to implement it though.)
Windows 8 (True. The dashboard is Metro in style, but closer to Windows Phone 8 than the desltop version in style and function. All games will have a live tile tracking stats, friends, etc)
Xbox 360 SOC (True. MS will be pushing this HEAVILY as Sony dont have it. One of the key messages on May 21 will be that your entire library is coming with you to next gen. The kicker though? Durango upscales 360 games to 1080p output. Again this is one of the few areas MS can claim a lead over Sony and they will push this a lot)
Chief will be in attendance at Launch. Possibly saved for E3, but Microsofts biggest games will not miss launch when they are going head to head with Sony. While not quite an original story, you'll play various missions from the Chief's career before Halo 1 in a squad based co op shooter. Think Halo x Borderlands in many ways - the character creation and upgrade system from Halo 4 is being carried over but will be pat of the campaign). Think spartan ops on steroids.
At this point it could go either way - MS are down to the wire on everything. The system and key games could slip - there's some very tired engineers at Xbox Campus. Pay very close attention on the 21st - the slight of hand could be just as big as Sony in 2005 if things not gelled).
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