Epic Games' technical head Tim Sweeney says next-generation games consoles need to be "huge and fundamentally new" before a hardware shift is justified.
"We have been able to ship three Gears of War games on the same generation of hardware, each one with dramatic improvements over the last and a two to three-year development cycle," he said.
"So it's been a very good thing for a game business today. With each new title, there is a bigger and bigger Xbox 360 installed base of users, so the games can sell more.
"On the other hand, it gets harder to generate the same excitement from the same hardware. That is when the new hardware is justified. But then you reset the installed base to zero and it's a lot harder to sell a lot of games again.
"So you should only replace the hardware when you can make a dramatic leap in quality, not just 2X or 3X. It has to be huge and fundamentally new."
Epic of course famously persuaded Microsoft to upgrade the Xbox 360 with more RAM, a decision that Sweeney claims costs the platform holder "$1 billion".
"They put in extra memory and that is one of the reasons we were able to make Gears of War look so compelling," he explained. "Without that extra memory, we would have far less space for details.
"That decision cost Microsoft about $1 billion, but you can say that it paid off big time. They would not have succeeded to the extent they have today if they had not done that."
Gamers will be hoping the Gears of War developer can dictate Microsoft's hardware plans again, after it showcased a stunning 'next-gen' Unreal Engine video early last year.