This pretty much tallies up with what MS long term plan was. To have a multi-functioning device that does everything in your home. As for being constantly connected to the net. Not a good idea. And having more than 1 model out, will only confuse the consumer. Same and new mistakes MS.
@stuka1000 To be fair, the PC market is always changing. There is no fixed rig per say (unless you count PC makers like Dell etc and even then you can make some adjustments to it) - in comparison to consoles, which are. Whilst the console makes the games more convenient and does away with the headache of whether or not it will run on the PC.
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