It's as easy to change a HD in an Eggbox or a piestation as it is in a computer, if you want to upgrade the HD just buy a new one and strap it in there.
The eggbox graphics are based of directX, and yes the xbox programming interface is a lot like coding for windows games. As for the hardware being old on the consoles, it's not the same hardware that you put in the computers and the enviorment allows you to get more power out of the hardware, the power of the hardware in the consoles doesn't really matter that mcuh as long as it is "good enough". The games are optimized to run on that specific hardware. The hardware in the consoles still haven't reached their full performance, none of the current consoles on the marker are used to their full potential, you could get those exact graphics showed in that video or better on a console.
The fact that the hardware is cheaper to be bought on a console then on a computer counts for a lot when it comes to sales, it is as I said above, the reason people make so many games for consoles is because there is where the real money is.
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