It will indeed shrink, but the only ones really hurting from it will be nintendo. We will see if the new generation of players will transition to consoles once they grow up or otherwise the entire industry will be in trouble. Shorter term however, everyone but nintendo really only has to be concerned about the rise in development costs versus the rate of new adopters. The current sales paint a very good picture of things to come and it is really at the beginning of next gen we can truly tell what the landscape has turned into. What is important to keep in mind is that we as a traditional medium can succeed with a far lower install base than what most think. It all depends on the devotion of the fanbase. Already next generation out performance last gen in software sales even though the install base is as low as 1/10th of the previous ones. It just goes to show how insignificant a huge portion of an install base is really passive when it comes to software purchases. If the industry could turn a bigger percentage of the install base into the heavy consumer, then we could rid ourselves from the need of consumer growth and maybe even afford to cut off quite the chunk of a reccomended install base.







