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HappySqurriel said:

It will take 10 years to reach profitability and neither the PS3 nor XBox 360 will last beyond 4 or 5 years (6 years if they're lucky) ...

If the Gamecube or XBox had the development costs associated with the PS3 or XBox 360 after their third year there would have been no exclusive third party development; after their fourth year there would probably have been no third party development at all. In order to have a viable system past 4 years your system needed to sell enough units in the first 2 or 3 years to maintain software development; as a guess I would say that for the XBox 360 and PS3 to really have a long life they would each need to sell 20 Million by the end of their second year, and 30 Million by the end of their third year (at the current rate this simply won't happen).


 Why this isn't going to happen is because they are going to have different iterations of both. Especially the PS3 as you've seen, they are going to make newer more cost effective versions and get rid of the old and keep doing that multiple times. So they will be profitable much sooner than 10 years. 



Thanks to Blacksaber for the sig!