Gears of War 2 executive producer Rod Fergusson has told VG247 that innovations in both games software and Microsoft services mean we've yet to see the limit of what can be achieved with Xbox 360.
Fergusson was quoted previously as saying the box had been maxed out, a comment he told us was taken out of context.
"I think there's still more it can do," the developer said, talking at GDC.
"Hardware, in some regards, always has limits, but it's the software that takes advantage of that.
"The [Unreal] engine is evolving - it evolved dramatically from Gears 1 to Gears 2 - and I think you'll see people continue to push that envelope about how they use the memory, and how they use the hard drive, and all those sort of things."