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BasilZero said:

Although there would be alot of positives in something like that, it would also have its negatives.

For one, competition of first party titles wouldnt be as good as they are now. I think one of the reasons why Sony created so many franchises this gen was to compete against some of the other franchises that were exclusives or are exclusive on PC/Xbox360 (such as Mass Effect 1, Saints Row 1, and MS' first party series Halo).

If something like this happens, it would be like Nintendo's Wii all over again. A monopoly to some certain extent with some awesome first party titles, but not as big as previous consoles and a less than stellar third party line up. (It would honestly make third party developers lazy to a certain extent using gimmicks more than gameplay as we've seen in FF Crystal bearers, but of course this all depends on the developer themselves).

^ Of course the third party part might not happen but you would see the death of several smaller known franchises made by Sony and Microsoft to give spotlight to the more known franchises.

 

I am up for cross play online, but not under one system, I like having a choice. It also motivates a few other developers who are loyal to a certain system to do a bit better than they did for support of the system or to attract fans.

Exactly this. It makes sense initially, 1 system, 1 set of specs and different manufacturers making different flavored boxes like with dvd / blu-ray. This has actually been tried before by Microsoft with the MSX.

But indeed there would be no more initiative for Sony and MS to put out the best of the best 1st party titles to lure consumers. If they run just as well on the box you buy with the other brand on it, why bother. They might even close more studios as it will be harder to distinguish themselves from 3rd party titles that no longer are hampered by getting the games to run on both platforms.
The only winners in the end would be the CoD players.

And ofcourse if they merge it will open the door for a new player to fill the void of a specialized games consoles.

Is it forbidden by Sony and MS to do cross online play? What stops 3rd party devs to offer this when they run their own servers? Why are autolog leaderboards separate for the consoles? Some healthy rivalry might keep people interested longer in certain games.