Ok I have gotta add one more comment, this will hurt the Xbox fans but it kinda proves my theory that Sony first party devs are ahead.
Microsoft CHOSE to show Call of Duty Ghost, the game looks like current gen CoD games with a few more features here and there. The game didn't look "next gen" at all. Why close with a cross gen title? Why not show something amazing your first party devs are working on?
Sony had the balls, they didn't ask EA to come on stage and show BF4, they trust their own studio and delivered big time.
because Microsoft approach to this first glimpse is to attract as much awearness to it as they can. To do this they focused on broad appeal, t.v, sports, and cod. A popular racing game, 2 sports games (arguably the 2 most popular sports in the world), and cod. The only exception was remedy's game, but that seemed to be a nod more towards the cross, game-t.v aspects, along with the mention of the halo-spielberg announcement.
It's naive to think they were relying on EA, it's much more likely that they want the idea of EA and Avtivision (the two biggest names in publishing) to be attached to the xbox brand.
Also, the quote needs context. Are they talking about pushing the highest end graphics, or developing hardware which pushes the highest end graphics. The former could simply mean that they're looking to ensure slow but steady increases to game fidelety over the console life, the second means they're cheap.