Microsoft may get out of the business if they are doing poorly, but they really aren't right now. I mean, yes, Sony has a small competitive advantage and MS will probably have to drop prices before christmas to keep the sales matching, but the fact that they've gone from a complete outsider to competing with the big boys in two generations I think gives MS execs hope.
The 360 is already starting to turn a profit (I think, and I know it'll take forever to get over the sunk costs of the XBOX and development of the 360 and RROD money), and they're not going to leave the field just because they lost a lot of money in the past. Plus, MS isn't going to abandon all their 1st party IPs they spent millions developing (GoW, Halo, ect.)
By the time 2011 rolls around, the technology that makes the PS3 unique and powerful is going to be significantly cheaper and more commonplace, and microsoft could easily cobble together a powerful successor to the 360 using Blu-Ray, next-gen graphics cards, and terabyte harddrives for less than the PS3 costs right now.
As for ninty and sony, I think you're entirely right. Sony is still the best console on the field in tech specs, and so they want to stay with their console as long as they can.
If MS comes out with a Nextbox in the next, say, 5 years, they're gonna get the jump on Sony. Undoubtably Sony has learned from their mistake and probably has a PS4 already in development, so they won't get caught off guard completely, but it's still going to be a killer blow to Sony.
If MS and Sony start the next gen in the next 5 or so years, I have no idea what Nintendo is going to do. I could see them just announcing Wiis for, say, 150$ in Red, Black, Silver, and White, and beating the NextBox and the PS4 into the ground. If they can't stand up against the next gen, THEN they'll release a WiiToo (most probably not branded using the wii name), which is basically a Wii with improved Motion-Plus level motion controls, HD graphics, and even smaller than the wii.
I write too much : (
Wii has more 20 million sellers than PS3 has 5 million sellers.
Acolyte of Disruption
