Legend11 said:
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You make a very good point... console manufacturers are going to want to milk as much out of the current generation, particularly considering the red bath Sony and MS have taken. Naturally, this isn't an issue for Nintendo, as they seem to have been profitable right out of the gate.
I'm guessing that one of the following scenarios might cause a disruption to this approach:
1. Nintendo has been quietly designing an "HD" box and is only waiting for the right time (component cost reduction, HDTV adoption, Blu-Ray adoption, market conditions) to move
2. MS, still floating in cash reserves and still one of the most profitable companies on Earth, decides to swallow more red ink
Three years may not seem like a long time, but the current generation of consoles will definitely start getting long in the tooth, particularly considering how many commoditized parts are used in them, i.e. - memory, support chips, etc. So from a hardware perspective, at some point in time it will likely be a cost savings to move onto the next generation of components rather than trying to keep living in an out-dated hardware environment.
Also, as long as the processor/graphics keeps a similar API as an abstraction layer, it won't be as expensive as what Sony did with the PS3... in other words, the next generation might be more of an evolution rather than a revolution.
One last factor is PC gaming... if this drives the right components down into the ground, price-wise, it may make it possible for a new generation of consoles to come out at lower price points than what MS and Sony were able to accomplish this gen.
So, while I agree that it might be somewhat expensive to move on in another three years, I still believe it's very possible depending on what strategy the console companies adopt. Sony is the least likely, but even they may decide that the PS3 is getting a little crufty by then.