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So far it looks like industry is growing. Both the 360 and PS3 are almost certainly beating original Xbox/Gamecube sales, and even in the worst case scenario, there's no way the Wii will be far from the PS2's sales.

I expect one of the HD consoles to stay in the 30-40 million range, and the other to rise up to 40-60 million. Both might be able to coexist, but I think the competition for "big HD gaming machine everyone has" is too brutal for both to prosper. So far the US has been the only market where two consoles have achieved any great amount of success, although Europe might join the club.

The Wii is a real wild card, since sales are just barely over PS2 levels, and third parties haven't truly arrived yet in great numbers. It has the potential to do better than the NES, slightly better than the PS2, or way, way better than anything we've ever seen, but I think it'll be a while before anything can be said for certain. I'm fairly hopeful that we'll see another old stuff->NES, or SNES->PS1 type leap between generations.