Is the core gamer going to be playing on consoles for a majority of this generation they way they were during the last? I'm wondering if PC graphics will eclipse these consoles much earlier in their lifecycle this time around than last. It took me 5 years to buy a gaming PC this time around when it was clear that the consoles couldn't keep up. I think it will be much sooner this time around (actually, i doubt i will be selling my gaming PC at all).
Taking this into consideration, maybe MS feels like a graphics powerhouse isn't as high a priority since these round of consoles wont hold the graphics crown against PCs for very long anyway. A vast majority of titles will be multi platform anyway, and people who insist on cutting edge will have gaming PC rigs regardless.
This all assuming, of course, that Durango is < in terms of power to begin with...