Gears of War 2 executive producer Rod Fergusson has told VG247 that innovations in both games software and Microsoft services mean we've yet to see the limit of what can be achieved with Xbox 360.
Fergusson was quoted previously as saying the box had been maxed out, a comment he told us was taken out of context.
"I think there's still more it can do," the developer said, talking at GDC.
"Hardware, in some regards, always has limits, but it's the software that takes advantage of that.
"The [Unreal] engine is evolving - it evolved dramatically from Gears 1 to Gears 2 - and I think you'll see people continue to push that envelope about how they use the memory, and how they use the hard drive, and all those sort of things."
He added: "I think you're always going to see improvements for specific games and the way they can architect the technology to take advantage of the hardware in the best way possible."
"I think there's still lots of room to grow."
Fergusson said that developments in 360 UI software and Live functionality would also help keep the platform fresh.
"I think a lot of it too comes from the services side, and knowing what's coming to Xbox Live in the next couple of years," he said.
Roll on Gears 3, is all we have to say.