Even with the SoC GPU power would be nothing to wow about but it makes more sense.
Any decent CPU upgrade would have MS spending transistors in ~50/50 between the CPU or GPU or worse. They are not dumb so I believe indeed that dual graphic is the only reasonable option.
Well It's unclear if they want to last 7 years without a replacement next time. In any case we have to take in account that the pace/rate of performance increases in the PC is decreasing as they hit the power wall and optical reticule size limit.
I could be pleased with a "traditional" set-up like a quad core power7 derivative and a GPU akin to hd6850 with a 128bit bus or 192 bits to main memory.
The question is enthusiast here would be more happy? May be, I'm not confident here.
will it make a sensible difference to the intended market? I'm not confident either.
Between my set-up and a hd6850 the are only 3 SIMD array of difference, either +33% or -25% in computational power. AMD card have texturing power in spare anyway. There is the number of ROPs to consider but it's somehow linked to the memory bandwidth/bus width and the HD 6850 akin thing could scaled down in this regard (people here were adamant that anything but 128 bits bus is impossible too).
Anyway, I guess that were the EDRAM magic bullet enters the show and how it is adverse to modern form of (deferred) rendering that require a lot of RAM. That means tiling, another bus, another (big) chip and possibly games not rendered at 1080 xAA. Things is people here are kind of adamant that games have to be rendered at 1080p either it's BS not worth upgrade.
I'm not sure you see were I'm heading but at some point it's kind of bothering not matter what manufacturers do ultimately.
So your essentially suggesting a SOC + GPU with the idea that the SOC will be universally utilized in multiple other devices outside of gaming ...
I get where you're coming from concept wise, but that would seem to be a bit too high powered for other embedded devices.
Modularity in design is a good concept (Sony attempted the same with Cell) but the target use cases have to make sense.
I will say one thing that would be a coup for MS on a profitable from day one console:
Windows8
If MS isn't worried about losing money on the console at the start, they can also release Windows8 on it, or just put it in the box at the start without worrying about how many games people buy.
HD Kinect for a mouse interface and voice recognition for a keyboard (or optional on-screen variety with HD Kinect).
Implications of such a system would be huge for parents looking to buy the family a cheap computer and would help adoption and integration of Windows8/metro.
It would suck for the loss of Hardcore gamers and they'll likely get shafted by developers going forward, but in the longrun, it might be the best strategy.
In that light, your proposal makes a lot of sense.
Core $299 (windows8 + KinectHD sold separately)
Ultimate $499 (with KinectHD, HDD and Windows8)
It would sell.
They'd lose the core gamers, a chunk of developers, a chunk of XBL money, and the attache rate (licensing fees) that core gamers brought to the table ... but they
might make up for it in casuals.
And honestly, they're not really losing the core if the core heads to PC gaming aka Windows land. But this would ultimately lead to unsatisfied gamers as devs target such a low spec again, gamers might just lose interest and not feel the need to support the industry financially (aka more piracy). This would lead to developers/publishers saying screw it, and going belly up, leading to the death of the gaming industry as we know it ...
But we'd always have Angry Birds.
On second thought, that idea sucks.
Seriously though a low spec console does have merit for MS if OS integration is in the plans,
but then where does that leave Sony?
Do they follow suit with a low spec ps4? Or do they embrace the opportunity and snatch up the core gamer for themselves?
If the opportunity presents itself, I hope Sony has the financial ability and vision to pull it off.