There isn't a snowball's chance in hell that Sony announces a new console in 2011; GT5 isn't even out yet, and they're only about to roll out Move and stereoscopic 3D.

There are still plenty of games to be released in 2011, announcing a new system next year would most likely hurt the sales and make developers angry.

So IMO, PS3 should easily reach 60 millions as I don't think it has reached full speed yet, and Xbox 360 should also reach that figure assuming Natal sells well.

PS4 announced E3 or TGS 2011 (probably TGS actually), released Q4 2012.  That's a pretty reasonable and realistic timeline.

How does a snowball effect one's chances in anything?

PS1 = 1994 (leader of the market by HUGE margin, hugely profitable)
PS2 = 2000 (6 yrs, despite ps1 success, and 2nd to market, also "leader of the market by HUGE margin, hugely profitable")
PS3 = 2006 (6yrs, despite ps2 success, and 2nd to market, HOWEVER 3rd place and probably 2nd at end. Lost massive marketshare and barely profitable in 4th year and potentially barely break even overall)

PSP had multiple versions every few years.
PSPGo lauched to little success, if any
PSP2 is about to be lauched (we all know it) even though PSPGo just came out and only a couple years ago PSP3000 launched.

X360 has been out for 5yrs. EVERY losing (its 2nd about to be 3rd) console has either left the console business or put out a new consoles within 6yrs.
MS knows their 1yr head start is what has allowed them success in US and EU. They will want that momentum again to hopefully keep a lead over Sony again.

Natal and Move won't be huge pushes for their hardware. Natal will be limited on what types of genres it can actually enhance gameplay with and simply won't push new customers that are already satisfied with the Wii experience. Move will simply copy game experiences already on Wii, again not providing a unique reason to spend the $$$ to get a PS3. Both will sell <10 millions, almost entirely on existing base, unless its essentially given away.

Just like Sony just admitted PSPGo was a test, that essentially failed, Natal/Move are tests to see if they can get Wii's audience to jump ship. However, Wii's expanded audience is not core techie people. They won't buy HD systems just because its HD or bluray. Otherwise, they would have already. They will stick with the already satisfying experience all their friends also already have which already services their needs.

MS/Sony will show new systems by the end of 2011. I think at E3, but it could be later at TGS, unlikely for MS. If they wait until E3 2012 it will be remarkable. However, the new systems will launch by holidays 2012. Even with its success, Nintendo has finally learned to not wait so long to launch. Wii's successor will be announced as soon as MS/Sony do.

2012 will usher in new machines.

Problem is, you're not taking the increased development time & costs into account. As you mentioned, Sony is barely profitable as of now, and I don't think they could afford launching a new system until they get enough cash out of the PS3.

Move and stereoscopic 3D sure are gimmicks, but they will still help in making the PS3 look fresh. A lot of developers are still busy working on their first or second PS3 title (Team ICO and Polyphony Digital have yet to release anything major); apart from maybe Naughty Dog and Liverpool Studio, I don't see who at Sony would have the resources to even start working on a PS4 demo.

I agree that we should see new machines in 2012, but my guess is that Sony is going to wait as much as possible before making any announcement.

Part of the problem with an extended PS3 cycle scenario is it's vital reliance on multiplatform developer support.   If Microsoft really does shift away from 360 and on to a next gen format in a year or two (which actually seems to be an idea that most believers in Sony "10 year plan" also subscribe to), HD developers suddenly lose half their market... and I'm not sure if developing for PS3 solo is really a viable alternative.  That's the thing, PS3's future hinges on 360's future and even if Sony doesn't want it, the industry may have to move on relatively soon...

True, but since Sony is probably fcked up either way, I'd say their best bet would be to wait and release a PS4 that is substantially more powerful than the X720 or whatever it will be called.

Also, right now there isn't really any new technology that the PS3 can't handle: it has HD graphics, 7.1 HD sound, wireless network, Blu-Ray capabilities, and it will soon have motion sensing technology and stereoscopic 3D. Apart from a faster CPU and GPU, what could the PS4 really bring in terms of innovation?