I was just joking about $80 games, it was a stretch to go to $60, and I imagine they'll stay at that price for awhile.
But what if the NeXBox only slightly bumps its graphical capabilities, while offering more functionality? Instead of trying to double or triple the graphical power, they offer more reasons to buy an Xbox system?
Giving it a Blu-Ray player, a more capable 3D GPU, and basically making it a PC that connects to a T.V is a good place to start. They could even make PC games and Xbox games one and the same. If developers are focusing more on consoles, but like the freedom of PC, why not make them one system, and who better to do it than the company who makes Windows, the most developed for PC OS. Part of the PC's appeal is to push the graphics, but that is dying out as mentioned by others, and they could make games with the NeXBoX in mind and have its specs as the minimum requirement for their games.
Beyond that, what if MS can bring WoW other MMORPG's, and other PC games together with XBL, and other web services (Facebook, Twitter, other popular Internet TV apps)? Developers could make one game and along with having it playable on two systems, have Facebook and Twitter leader boards? This could even be good for 'casual' games made for Kinect, along with browser based games, and Facebook games. What if MS can join all types of PC gaming together with Xbox gaming? And do it because the next system is powerful enough to do it all.
They could include a wireless mouse and keyboard in the console package alongside their normal controller, and even do like Nintendo does, when showing what controller set-up the person who keeps winning is using to beat you. I know hardcore PC gamers don't like wireless equipment because of ping times, but they're getting better, and would satisfy most people.
MS could also throw full Kinect support for controlling 'smart' appliances around the home (thermostat, coffee maker etc.), syncing with Ford Sync cars, their Hohm energy saving software (it's for your entire home), and other things making the system even more attractive. MS is in heavy talks to bring subscription T.V in through the Xbox console itself, and if they can get a deal done in two years time, the NeXBoX could be the one box to rule them all.