“We’re not going to be launching a new console any time soon… I really believe he [Steve Ballmer] was speaking about Project Natal. We want to make sure people know that we’re excited about Project Natal… But we’re barely halfway through this generation. We’re happy with the Xbox 360, so there are no changes from that standpoint. For the time being, we’re really just showing a whole new category of gaming.” – Microsoft’s Director of Product Management for Xbox 360 and Xbox Live Aaron Greenberg
If you just take a look at the money that Microsoft has lost since they entered the video game console race and combine that with the fact that they have only recent started to (occasionally) turn a profit in their Entertainment and Devices Division there is no way they would give up on the Xbox 360 now. Despite all the rumors, I believe this statement from Greenberg.
-Justin


[...] Aaron Greenberg’s statement the other day and now Steve Ballmer clearing up his comments this should pretty much put this [...]