If you have a fairly modern PC, you already have something capable of creating GFX equal to or better than the XBox.
When creating software, developers of PC games have to take into acccount that not everyone is using the latest state of the art technology, nor are the specs of the machines out there the same. So, normally it's best for them to meet somewhere in the middle if they want to provide for as large a customer base as possible. This is also the main reason why you're more likely to find bugs in PC games than you are Console games - there are so many different spec PCs out there, it would be impossible to cater for everyone.
Console developers on the other hand don't have this restriction holding them back. They know exactly what they're dealing with and can push the console to its limits. (except perhaps when it comes to deciding whether the game will run in NTSC 60Hz or PAL 50Hz!

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