I've always thought a two major system competition was best. Fourth generation had the SNES and Genesis as the main competitors (every other system was a minor competitor at the time), fifth generation had the N64 and the PS1 (the Saturn was no comparison).
I personally feel things were better that way.
With that said, it'd work nicely if Sony dropped out and it was Nintendo vs. Microsoft. Japan vs. America.
And these days, with how expensive game development has become, it'd work MUCH better for developers if one of the major names dropped out. And because developers would be better off, they'd be able to make more games, and make them better. As a result, us gamers would end up being better off.
So really, it's only Sony fanboys that can argue against this.
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