Microsoft will be in a position to offer a compelling Natal package for $199 in 2010 that much is certain. The Arcade is at that price already, they've a new MoBo this year reducing silicon again and they'll probably get away without a price cut at all.
If Nintendo do make a Wii HD (and that's extremely debatable if they want backwards compatibility) then it's not going to be any cheaper than that.
Worried about turf - Yes why would they not as they lead the HD area of the console business they would naturally be concerned and obviously will look to strengthen its position.
WiiHD does not exist - Publicly that is true, I am not sure it does not exist. Natal did not exist until very recently either.
Will not gather significant support - We have no idea on release date yet and certainly no idea of what support it will gain. Certainly at the moment I would say the development community is excited about this product and rightly so. Whether Microsoft can pull this off is open to debate but not necessarily high fiction.
Quote from the article which I thought at the time was the biggest announcement for Microsoft this year but seems to have been buried due to the Natal news.
But Pachter pointed to more integration of online services with Xbox Live as the company's most significant unveiling last week, as it adds Netflix, Facebook, Twitter and Last.fm to the console's offerings.
"We were most impressed by the company’s clear enunciation of its strategy to turn the Xbox 360 into an internet and media hub for the living room, and we believe that the most momentous news of the press conference was the opening up of the Xbox Live dashboard to the internet.
Pachter "We do not see Project Natal as a Wii killer; rather, we think that Microsoft intends to introduce it at the same time as the launch of the Wii HD, and hopes to hold off Nintendo’s plans to encroach on Xbox 360 turf after 2010."
@mrahaju, Well no, but they felt it was worth putting in the top 10 games, and they do list Milo & Kate together with Project Natal in the top 10 under the same link.
OXM UK reports that EA feels the Xbox 360 has "maxed out" while PlayStation3 has not.
The comments came from EA Games Europe's Senior VP Patrick Soderlund, talking to OXM during E3. However, despite feeling that PlayStation3 hasn't been maxed out yet, Soderlund also suggests that Microsoft has the current advantage over Sony.
"I think Microsoft is on a roll right now," Soderlund says. "They're doing really well. If I was Sony, I would have a headache, to be honest."
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Mean to say price cut in 2009 :)