I just finished watching the E3 Press Briefing by Microsoft. and it was amazing. In a typical year, any one of the announcements would have been ground breaking, and frankly putting them all together was ground breaking. Facebook and Twitter integration, music services through Last.fm, television and movie services in full 1080p and instant on streaming, a new Metal Gear Solid franchise coming to the Xbox for the first time, two new Halo games from Bungie including the newly announced Halo: Reach, plus the 3D motion sensing technology behind Project Natal. Incredible scope.
It appears to me, that what happened behind the scenes here was that Microsoft decided no to introduce a new console for the foreseeable future: in essence Project Natal, which will come bundled with all Xbox 360's *is* the new Xbox. I think that this is a great idea, there's still a lot of power in the machine that can be exploited, and adding in the new controller free mechanism will create a very new, and different experience. They did not provide any information on pricing or availability.
I think that just as important is the Facebook and Twitter integration. For the first time, Microsoft is opening up Xbox Live to the rest of the internet, but in a much more controlled and integrated manner than Sony is doing with the PS3.
I'm looking forward to discovering more about this news. It was a very impressive performance.