The lower price point Microsoft hopes to achieve is designed as a way to allow for a higher next gen Kinect adoption rate. A lower price must be one of Microsoft strategy points with their next console as a way to grow their consumer base.
The blog reports the next Xbox will have a single main processor that's joined by "assistive cores" for "graphics, AI, physics, sound, networking, encryption and sensors." It will run on a modified version of the yet-to-be-announced Windows 9 and feature a Zune HD-like interface. The console is said to be designed as a joint venture between Microsoft and "two partners based on the ARM architecture.”
It’s also rumored Microsoft hopes to reveal the next generation Xbox at 2012’s E3, with a late 2013 launch. More likely however, Microsoft will reveal a few details on their new console at E3 next year but will wait till 2013’s E3 for a full reveal followed by a September 2013 launch. -TNGG