Nintendo will win this generation because they have the most innovative console on the market. They did something different than just "here's your controller, here's your console, here's your game". They came up with a way to make the controller seem like it doesn't even exist, and they applied it to simple and entertaining games that EVERYONE (as in E for Everyone) can enjoy. When 90 year olds are playing your system, there is definitely something appealing about it. (I have several opinions on the quality of Wii titles overall, but that's for a completely different discussion.)
If Microsoft or Sony came out with something that pushes the envelope in the next gen, (no, I'm not talking about the next gen Cell processor, gimme a break) that takes what the Wii did and makes the games even more immersive somehow, then they could easily take the crown back. How about full 3D HD graphics WITH a motion controller AND more games that aren't just for 8 year olds? I think that both Sony and MS have the vision to pull this off, it would just depend on which one does it better. Nintendo is not known lately for their graphics, and that probably wouldn't change much in the next gen. Again, if one of the other two could take what everyone loves about the Wii adapt it for an even more diverse crowd (not just 8 year olds, 80 year olds, and chicks) and make it full blown 3D capable as well as HD, you would have a winner. As long as you could make it affordable, that is.
It would take a lot of R&D to pull this off, and that may or may not be already happening at this very moment, but it's just a scenario. I may be skipping a generation--maybe next gen will be the standard increase in specs and graphics, and the NEXT generation after that would move things along. Who knows? Right now, Nintendo has all the power, and they probably have no plans to back down.
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