Don't expect Microsoft to pull out after this generation. Losses right now are like ~$7,000,000,000 for the Entertainment Division since Xbox launched. By the end of the generation, losses will either be ~$10,000,000,000 (Microsoft keeps losing money) or more like $ ~5,000,000,000 (360 becomes profitable for a while).
Most analysts believe Microsoft won't leave unless they lose over $20,000,000,000 on Xbox brand/consoles/gaming. They have at least two more generations of huge losses for that. At some point before then, I think that Microsoft will be consistently profitable in the industry.
As for the 3rd parties...economics right now make the support about a dead heat. High end PCs, 360 and PS3 have ~14+ million users, Wii has ~ 10 million users. The 1.4x greater userbase offsets the extra expense (say on average it is 2x as expensive to develop for 360/PS3 over Wii) in cost for developing for 360/PS3. If Wii has 20 million users by year end and PS3+360 amounts to 22 million users, the economics shift to Wii - especially in Japan (Wii sales> 360+PS3), and by the end of the year in Europe Wii sales could be greater than PS3+360 combined. Because of the delay in the USA market, 360 and PS3 will continue to get strong support. However, most of the biggest publishers need Europe/Japan, which is why I think the change will begin with the biggest publishers by region (Ubi Soft, EA, Square-Enix) and the smallest/niche publishers (Atlus, Majesco) before reaching the middling developers (Take Two, Codemasters, Midway) who have the most to lose from reading the market wrong and reacting poorly...
People are difficult to govern because they have too much knowledge.
When there are more laws, there are more criminals.
- Lao Tzu
