You have a point with incentives. Last gen, during this time, Sony had no incentive to release PS3, Nintendo had no incentive to release Wii and M$ had no incentive to release 360.
In reality, the business works that way that you need to release new hardware so that you can sell new hardware and new games for it. At some point, the market will saturate, when you can no longer sell more consoles and the same will happen to games. There's only a certain point where you can improve on your current hardware with the same controller and functionalities.
Sony and M$ are losing marketshare and games along with it. If they want to fight each other, they need hardware that differentiates from competition. And besides, the developers want more powerful hardware so that they can games with better graphics.
XBL and PSN will be on the next gen systems too, so they aren't a reason to stick with the current hardware.
Each of the three have incentives to make a jump to next gen, Nintendo being the only one that "can wait", but even them need to make the jump so that they can keep on selling games and consoles. New hardware is always made in order to make money, not because gamers wants to. Also, releasing new hardware doesn't mean that the old would be ditched. As long as the platforms keep making money, they can live along the new consoles.
And why would 199 pricetag make PS3 more interesting to new audiences? If you were meaning BD players, PS3 will be priced above standalone players, since the hardware manufacturers (including Sony) don't want loss-leading PS3 to eat away the sales of profitable standalone BD players. Assuming that PS3 would get into a position where PS3 would be BD player that represents the majority of BD players market (which could be possible, if PS3 would be sold at 100 less than the standalone players, it would effectively turn BD as UMD and kill the format.
Ei Kiinasti.
Eikä Japanisti.
Vaan pannaan jalalla koreasti.
Nintendo games sell only on Nintendo system.
