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There is another factor to consider in this which I havn't seen anyone mention. That being Sony's plan to make the PS3 an effective Linux computer on top of being the 'convergence technology' everyone's been talking about for years. My brother has been wanting a PS3 (but can't afford it) for exactly this reason (he hates MS). With the threat of PS3 introducing mass Linux use, there is no way MS will pull out of the console war irregardless of how many billions it may lose. Not unless Sony does first (and there's no threat of an Apple I-console). I also question if MS even wants to make a '720'. I suspect they'd rather reinvigorate the PC game scene (ala Vista) and let that compete with the 9th generation, but again x-box will remain as long as it serves to fend off linux/Mac OS game systems. Sony is also relunctant to leave as long as PS3 stands to help it win the Blu-Ray/HD-DVD war. The assumption is, if they kill HD-DVD, then PS3's will sell like crazy. Umm... maybe... If Wii hasn't converted too maybe people and publishers already. If Sony loses the format war (or can't win decisively) I expect we'll see a PS4 (and a lot sooner than the 10 years that they brag about) that's quite different than the PS3 but they'll still want to become the hub of the living room so they can sell Sony music and movies directly to you (instead of letting MS or Apple become the gateway provider). But they may seperate the convergence strategy from thier PlayStation system, or make a Wii-like convergence PS4 system (IE: Less focus on graphics, more on simplicity and fun). MS would respond in kind. But if Sony and MS pull out. I bet is on either Apple or that British maverick Sir Richard Branson to introduce a Virgin Games System. Hey why not? Look at how diverse his Virgin line is - airline, cellphones, comic books...