If true, the 'smaller' box makes me slightly worried. Im not saying that it's impossable, but the 360 slim was already pretty small, and cramming anything decent in that is going to be tricky.
Heating issues, etc.. etc...
If the box is smaller than the 360, I think we def have a device that either matches the PS4 or is a little less powerful.
I just can't see why either company (apart from finacial reasons) would make consoles that are fairly 'meh' powerwise that are potentially to last another 8 years.
MS really has the oppertunity to one up Sony in this department, with obviously more cash. The minute alot of gamers feel that Kinect 2.0 has 'gimped' some of the spec in the 720, there's a good chance they will go PS4 or PC next gen.
I just can't see things like illumiroom working very well on a cheaper console though. Plus the fact that it was rumoured to cost $500.
If it has fairly modest specs, potentially 'always on', no second hand games, well... They may struggle out of the gate.
3rd party exclusives are nice, but things like Hawken aren't really where it's at. MS need games like Read Dead 2, Fallout 4 etc... as exclusives. really put the cat amoungst the pigeons.
Having EA come on stage and say:
"There is exclusive DLC for Battlefield 4 on 720", just won't cut it. Maybe MS has payed for all the EA sports titles to be exclusive? That would be big (not for me, I don't play sports games that often), but, tied into Kinect and the sports shows that are streamed, that would make sense.
It would also explain all the Wii U EA sports games that are missing, more than it being 'teh crap derp'.
Overall I want to see:
Powerful console (don't mind paying more, just make it powerful and worth having under my TV for 8 years)
All purchases on 360 to be transferable
Lots of GOOD third party exclusives (Fallout 4 etc...)
Good First party games / new franchises
Backwards Compatibility (not a deal breaker, just nice to have the option)
However, as companies seem to like to draaaaaaag things out these days and announce things that aren't out for 4 years, I think we will see:
No actual specs announced (meaning it's worse / same as PS4)
Big focus on Kinect 2.0
EA to announce some hideous new business deal
I hope it doesn't go like this though! :)