[citation][nom]9krausec[/nom]Sort of defeats the purpose of consul gaming. Why people don't just build a PC and plug a Xbox controller into it is beyond me.[/citation]
It wouldn't defeat the purpose of console gaming. It would still be a highly optimized and specialized platform. It would simply be able to be upgraded. Upgrades to the hardware would probably mostly have to be die shrinks with tweaks that don't take anything from the previous architecture, but add onto it. For example, let's say that MS used a GF114 in the next Xbox. If they wanted to upgrade it with more performance without increasing power consumption, a Kepler GPU would not be an option, but a die-shrunk GF110 could be.
It would run at the same frequencies and such so that old games could simply use only an amount of the hardware equal to the GK114 while new games could be made to use the full version or something like the Dolphin emulator for the Wii on a desktop/laptop could be done. It would still be highly efficient (unlike a desktop), but it could now be upgraded and either new games would have to be optimized for it while old games are still compatible but can only use the performance of the fastest setup that they support or both new and old games could take advantage of new hardware running a more or less identical architecture. The same would be true for the CPU; IE the CPU would need to retain the old CPU's characteristics, although it could be improved such as adding more cache and/or more cores with die shrinks.
Heck, clock frequencies could also be increased if implemented properly. It wouldn't be much more difficult to make an upgrade-friendly console that is still extremely efficient like a console should be than it is to make a console that isn't designed for upgrade capability. It would differ from PCs greatly.