CvGz said:
Just my two cents but if the next gen Xbox will be released as soon as 2013, then I suspect the next hardware gen will have moderate CPU upgrades, competitive GPUs, and a healthy amount of RAM. The economy is weak and China is restricting the production of materials needed for consumer electronics to raise their profit margins. I don't think a "blow everything out of the water" hardware generation awaits us.
AMD can surely deliver the goods and the CPU will also be a nice upgrade along with more RAM. Don't forget that when the Xbox 360 launched, it had all sorts of mumbo jumbo new tech that wasn't used anywhere else. This also applies to the PS3 with the then expensive blu-ray drive and whatnot. The technology that these consoles are counting on: GPU with shaders, tesselation etc., CPU for gaming use and RAM are cheaper these days. They don't have to reinvent the wheel or break the bank since pretty much all TV's max out at 1080p.
The main focus like Thurott said is going to be integration with the other Windows 8/Metro devices, MS can take their entire community with them over Xbox Live and I expect full backwards compatibility if they go with another IBM/AMD combo and that is very likely.
A lot has happened on the hardware front since the 360 launched 6 years ago. The next Xbox will show a leap in graphics and features. MS has been selling $399 Kinect bundles during holiday 2010 so I think that proofs that there's a market for a $399 device. Maybe they'll take a hit and launch it at $299. It's true that they likely won't take a $200 hit on this new machine but I don't think that is necessary given the current state of technology.
As for games these seem (rumored/some even confirmed) to be in production as of 2009/2010:
Alan Wake 2(rumored)
MGS Vancouver FPS title(they removed the 'Fps game for Kinect' bit from their website and replaced it with: Our mission is to push the limits of proven and unexplored game development and show the world what's possible on Microsoft's game consoles)
Halo 4(might've been moved to the next Xbox, might be a Twilight Princess sort of deal)
Forza World(confirmed to be in development, rumored to be shown at E3 2011)
These are the ones I remember but I also recall Fable 4, Saints Row 4 being mentioned as next gen games earlier.