I will add one caveat to my "doom and gloom" scenario for MS - we still don't know what GPU is in the box. If the GPU is PowerVR Tile based, all bets are off.
Hey Chefo, we actually don't KNOW anything for certain.
But taking the VG leak at face value we know it is not PVR but GCN. Just look at the cache design and the configuration.
Btw, the real wild card is...
price.
All bets are off if MS can fit this all into a $249 box.
The die space allocated to the CPU and GPU in Durango is a lot less than the Xbox 360 (which from a HW perspective was not overly complex or expensive once supply channels flowed). Xenos was 2 chips (about 182mm^2 and 80mm^2) at 90nm at launch and Xenon was about 176mm^2 (each CPU was about 30-40mm^2 and the remainder of die space was the 1MB of shared L2 cache and bus). That is about 438mm^2, give or take, of total die space.
Cape Verde (7770) is a 123mm^2 GPU at 28nm. Durango is fairly close to Cape Verde units + 32MB of ESRAM (which sounds like a variant of 1T-SRAM in which case it will be in the 20-50mm^2 range?). So the total GPU budget is shrinking about about 100mm^2.
The CPU side is similar. Jaguar cores are about 3mm^2 each and the L2 cache is 3-5mm^2 (give or take) so the CPU is going to fall under 60mm^2. Again, about 100mm^2 less than the Xbox 360 budget for the CPU.
Durango is looking to cut out 200mm^2 of silicon footprint--about 40% reduction in budgets.
The main memory this go around is also going on the cheap side; the Xbox 360 had for the time relatively fast GDDR3 memory; Durango is going with bog standard DDR3 (8GB of DDR3 can be scored easily for $50 at retail).
Depending on the cost of Kinect 2, packed in software, any HW BC, and the cost of the controller it looks like MS will be in a much better position on cost than last go around.
And then there is the crazy stupid Cell Phone pricing agreement plan--expect to see $99 Xbox 3's with 2-3 year contracts of XBL for $15/mo.
Which will position MS where they want to be: a small, affordable console that is a full blown set top box/media all in one experience.