It's nice to hear they're improving the hardware and making it more efficient, but is it just me, or does it seem like Sony is already outpacing them in this? Even with a year's head start, it's going to be hard for Microsoft to compete with Sony in hardware cost reduction. Not that it matters. They're both trying for second place. When they both said they were going for a different market than Nintendo, they probably didn't think it was going to be a smaller market.