In his most recent podcast, Major Nelson, a well known XBox PR outlet, has said that Epic Games cost Microsoft a BILLION dollars. Apparently, Epic Games was single-handedly responsible for the decision to include a 512 MB RAM chip in the 360, rather than a (supposedly) proposed 256 MB chip. This was brought up in relation to the recent debate over Microsoft charging for the Gears of War Map Pack. You might remember, Epic Games felt that the map pack should have been provided for free, and Microsoft wanted to charge for it.
If Microsoft is allowing a single developer to chart the course of their console development, they need to take a long, hard look at their development process. Now, if Epic said, "Hey Microsoft, we really need 512 MB of RAM in this console so that we can make some seriously great games that will help sell your XBox 360," and Microsoft said, "Hey, sounds good to us," then what's the problem here? Microsoft benefits by more console sales and associated hardware, Epic gets to make Gears (which rocks) and reap the rewards from that.
In the end, only Microsoft decides what will be included in their consoles. If they made the decision, then they have to live with the financial consequences of it. The only reason we're hearing this now is because Epic had the balls to stand up and say that the Gears map pack should be free. For Microsoft, even through a surrogate, to basically blame Epic for Live Arcade's pricing scheme is ludicrous. If they want to charge for the content, they should stand up and say so. They're a business, and they need to be profitable. I can respect that. However, I can't respect the way this has been handled at all.