DVD's are still grossly overpriced, they cost around 200 NOK new here, the same as when they first arrived. Movie industry is a little different, you have cinemas, rentals, purchases by retail and web.
Most games are only retail, so the store sets the price, along with manufacturer of media and/or developer of software (WoW sold for half price from launch here despite being several discs, for instance, mostly due to subscription fees though).
I remember the price of NES games in its day (500 NOK for the games in 1986 was extreme and the machine itself cost us over 2000 NOK, far more than any console today).
The incentive to make games that stand out or are even decent, vanishes when there's only one console, why spend wads of cash on good games with long development process' (and that may very well fail at moving units) when you can shell out crap and still sell it?

Besides, comparing a media format to console diversity doesn't really work imo, allthough by that logic alone, the Wii should be HD for equal output capacity. I'm glad its not, we need diversity. I also don't think Nintendo, MS and Sony would be glad to quit the bussines or being forced into cooperation. Imagine if all record labels were smacked into one, all movie studios and all game developers. That can't be good.

How on earth is that a one console generation? Or are people choosing to pretend Nintendo doesn't exist?

If it were to happen, I wonder what it would do for the sales of each companies exclusive software titles?

But the difference is that all record players (cds, whatever) play the SAME media.  Different companies can still make them, but I can take a CD that I was just listening to on my Panasonic, and listen to it on my Sony, my computer, my car stereo, etc.  In fact, there would be more competition in gaming, as more companies try to stand out on the unified platform.

Also, it's looking more and more likely that, in the next generation, you'll be able to purchase games either online (for download) or at retail.

This would be utter disaster as there would be no need to ever reduce prices on anything.

Having one format is fine, some kind of HD disc for next gen, but I don't like the idea of a single console for the aforementioned reasons.

 So I suppose M$ would better hardware choice. 

The most unreliable system ever is made by M$.  Developers complained about programing for the PS2 when it came out and 1/2 way through the gen. they loved the PS2. 

The only reason the 360 isn't as expensive as the PS3 is because it is made with cheap harware and poor (underfunded) design.  The RRoD is not the only hardware problem M$ has had.  Power cord isssues, disc scratching issues are all products of poor design and cheap manufacturing.

Sorry but I am not happy with Microsoft developed online services. Xbox live has incredible lag (try playing multiplayer Rainbow Six Vegas) which I never experienced on PSN. Also if there is only one console company, expect everything to cost more.

Didnt Microsoft once try to get Nintendo to join them but Nintendo told them where to stick it... Also i think it should go back to just being 2 consoles.

A single company in control of console gaming would be bad for consumers and developers.

Any money saved by developers by only having to make one version of the game would be eaten up by increased licensing fees of the only remaining console maker.