I dont understand why microsoft would even want to release a new xbox console. Their hardware and software for the 360 are at an all time high, so want incentive does microsoft have to release a new xbox?  Why would they want to incur all the costs of creating a new console? Why would they want to cut the xbox 360 hardware and software's life short, just to start again from scratch? 

Well they're going to have to eventually (within the next 2-3 years) due to impending competition from Nintendo and Sony with their new consoles... nobody wants to be the last one to launch next generation.  I agree though that it's much better to release a new console later rather than sooner and continue the 360s momentum.

But the thing I don't understand is how so many people can believe that the NextBox is actually coming out next year.  Seems to me the fanboys just can't accept reality, and some of them have gotten this crazy notion in their heads that M$ is going to pull a "Twilight Princess" with Halo 4 and shock everyone by launching it alongside the NextBox next fall, which is the most asinine thing I've ever heard of in all my years of gaming.

Because Nintendo is about to start next-gen with the Wii U.
Microsoft needs to come out before Sony in order to have an advantage. Just look at what happened with the PS2.

They arent rushing it. In fact microsoft is more than likely not going to release it the year after next unless! And this is a big unless. Unless The wii u does well, and if Sony comes out with a game changing system. But more than likely sony will want to ride this train just like microsoft. Sonys sells finally showed life and although 360 will win in sales I think both microsoft and sony are comfortable letting the Wii U do its thing.

They won't bring it out a major upgrade til Mid 13. The WiiU is the catch up system, not the next generation...

You'd have to be an idiot to believe that the company that sold the most consoles this gen and started a trend (motion controls) that the other two followed is making a 'catch-up' system.

i agree it is a catch up system. When the wii u releases it wil have just a little bit better specs and graphics than the ps360. Then if the ps4 and nextbox come out they will better hardware and graphics than the wii u. I imagine ps4 and nextbox will be CLOSE to pc graphics.

You have a point, I see no need for them to rush

That said, could this be the end of conventional hardware generations where the big three start within approx. a year of each other?

Because of the Wii U. While I doubt Sony and MS are really all that worried about the Wii U (in other words, they won't rush out their next systems), they still don't to be late to the next gen and give the Wii U a 2 year head start. So most likely they are going to drop their current systems to $199 to compete with the Wii U late next year, while their next gen consoles will be just around the corner (most likely mid-late 2013).

I don't know if you started gaming this gen but Nintendo's consoles have always been close to the others before the Wii.

An R770 GPU is more than just ' a little better' than PS360, especially since it will be customized.

That plus  the rumoured CPU, a nice amount of eDRAM and 1 - 1.5 GBs of system RAM would make the Wii-U a moderate jump over PS360 capable of much nicer graphics and other stuff.

Of course when PS4 and 720 launch a year after they will be more powerful but the gap will much, much smaller than Wii to PS360. Wii-U will actually be easy to port to.