About performance:
colleagues of mine made a "high end" demo for the publisher, meaning, taking the meanest and fastest CPU outthere, slapping a few gigs ram on it and taking the latest generation nVidia card, well actually, 2 of those, in SLI and push that stuff to the limit to "show off" the possibilities. Now that ran quite nicely ofcourse.
Then they ported that stuff to the xbox360
and it ran nearly TWICE as fast
The thing has 3 CPU's, with 2 core's each to start with, and tons less OS overhead.
And why is it a "pc"?
Everything which has a cpu, gpu, ram and input device is a "pc" then, so is a playstation 1, a supernintendo or a nintendo DS for that matter (or your dvd player, which also has these components ...)
And the Unreal 3 engine runs on pc and xbox360, so? I dont see the argument?
As said before, the fixed spec and the "no hassle" play are the biggest advantages of a console. I don't see why your favorite racing sim couldn't run on that console, as its cpu power (needed for all those "realistic" physics) far outruns that of your current pc.