Microsoft plans is going to try to follow the Wii and go after the family oriented clients with their new and improved XBOX that will have more family games and children titles
The Nintendo Wii is outselling the XBOX (and PS3) in the US, as its target audience is not just for the young adult gamers. It is directed to all ages, young and old. Heck my grandfather, which is 79 years old, loves to play Wii tennis. It makes him feel young again, especially when he beats me.
Microsoft is trying to do something to regain its lead in the game console war, which is why they too plan on releasing a "family oriented" game console that is age friendly. Rumors are surfacing that there will be a price drop as well as a new game featuring Mr Plod for the little kids.