I would say the reason is because they have Xbox 2 development kits already.
Anyways, heres something new, and different, and exciting from the article. The development tools used to make the game can be "taught" to do much of the work. Artists can pick an area of the map, set parameters for what they want, and the program randomly fills the area accordingly. Example, they can designate it as a forest, select the types of trees and bushes, soil type, etc all with as many parameters for each as they desire. The program then builds the area accordingly by itself. The areas are then tweaked by artists, whether in general or down to the smallest details. The program can also do the same thing for characters. The game will have 1,000 npcs. The artists can set parameters to generate a random character. It can then be tweaked by hand, including using a series of sliders to set things like skin tone, hairstyle, or change the characters age by upto decades. The program also can do this for the characters confidence, aggression, how they react to different situations, etc. And here's perhaps the biggest thing... This program will be included for consumers to use with the PC version, and possibly the console versions as well. Talk about getting to really make games yourself, easily, with the same tools as the makers, something I've dreamed about since I got my NES.
One other thing this makes me think of, (I've heard the new Unreal Engine can do similar things as far as generating environments on it's own when given parameters) is that next generation is going to be alot harder and expensive to do impressive things. And perhaps only the big players in the industry will have the money and employees to make the best games. The smaller developers will be in a tough spot. Although I guess, the DS and PSP will be home to them for the opposite reasons, atleast I've heard that smaller developers are saying this about PSP and DS as far as development.