The real question is does Microsoft, Sony, or Nintendo have the right stuff to excite the market once again? If not then it comes down to who plays the game better during the next generation. In a straight up brawl, Nintendo has %20-30 of the market locked up by just showing up. Then its up to the other console manufacturers to do much better than Nintendo to prevent that 20-30% from translating into another unassailable lead.
They have the one card they haven't played yet.
- Microsoft Windows
Which is probably stronger than Blu Ray was for Sony and it doesn't cost them a cent to play it. Why let Sony develop a Linux box in the next generation when people 95* out of 100 will pay for a Microsoft product over something which is free.
The opportunities that exist to excite/expand the market that I can see exist in these fields.
- Innovative, interactive educational software.
Consider the success of Brain training, if they can make the console relevant to everybody by giving them a new way to learn and interact with software to aid in that learning. It can both excite people and reach a whole new market of people from different ages and backgrounds.
- Languages
- Grade school level work, imagine 5x subjects x $30 x 5 years of school.
- Music
- Naturalised voice recognition.
One of the longest held dreams for the computer interface is being able to go "hands free" and command the computer in a naturalised fashion. Obviously this requires a massive investment but its something which gels with the direction their Windows OS is going anyway. They could for example use it to help bundle the console into TVs to improve their interface and turn Samsung and Co into another group of OEMs for them.
- 3d visual interfaces
Allowing people to use a naturalised interface similar in principle to the Wiimote in a visually 3d space completes the chain of immersion and will take the human/console interface into the next level beyond what is currently possible. This is one step backward from virtual reality, another as yet unrealised dream which has the potential to excite the market.
Nintendo cannot be beaten at their own game, now they are coming off some major success, they are unlikely to throw it away. You can't throw money at them to beat them, you have to pull the rug out from under them. If you cannot pull the rug out because they have anchored themselves too deeply then they will run away with yet another victory.
Tease.
