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Ironially, the Wii's success and PS3's difficulties have afforded Microsoft some time.

The Wii is too successful for Nintendo to pull the plug now. It will easily coast for the next year, and may be able to do so without a price cut. The Wii almost certainly has added another 2 years, at least, to its intended lifespan. So even if Nintendo was intending to cut the Wii loose in 2010 (just 4 years instead of the usual 5), we probably won't see a true Wii2 until 2012 (though a WiiPlus of some sort may act as a stop gap).

Meanwhile in Sonyland, Sony desperately needs to make some green back on the PS3 before launching a PS4. As was they were not going to launch the PS4 until 2012 (PSX- 1994, PS2 - 2000, PS3 - 2006), but I'm sure they were planning on having made some money by now. With all their difficulties, the PS4 probably won't launch until 2013, even 2014.

So that gives MS until at least 2011 if it wants to beat Nintendo by a year, 2012 for Sony, and that's assuming they choose to go for an early launch again (which helped them "beat" Sony, but clearly did nothing to stop Nintendo).