I have to agree on everything, but I want to add a few things.

First, when the companies reps talk about "our console will last another 5 years," what they are implying is that they will be making a profit off of those consoles for another 5 years. This has nothing to do with whether or not they currently have a successor under development or not. All it means is that over a 4 to 5 year period, they have gotten down the costs of producing their console to a point where they are making a generous profit off of each console they sell.

Second, neither Nintendo nor Microsoft want this generation to go on another 5 years. If you compare the graphics for Mafia 2 between the PC, 360 and PS3, you can really start to see the age of both the 360 and PS3 in comparison to the PC. For example, you cannot even get a clear reflection in a mirror of your protagonist in either the 360 or PS3 version, while your reflection is as clear as day in the PC version. At this point, the HD twins are beginning to show their age meaning a 2012 or 2013 Xbox 360 or PS3 successor is not far fetched at all. I expect a Wii successor come holidays 2012 or Spring 2013 at the latest.

Finally, as for Kinect and Move, expect the 360 and PS3 versions to be entirely compatible with the next generation Sony and Microsoft consoles with two versions of the same game, one for the older and one for the current console.

As stated, to be dominant, need to have some incentive to get more people buy in. And in 5 years, i don't think so.

Why? Because the wii is held by Nintendo alone, they can't count on 3rd party support to pump appealing software for the next five years. and Nintendo won't have the resources to support it this long, they already have to support the DS, Wii and 3DS, in few years (2011 or 2012) they will have to support also the Super Wii... They already have trouble to avoid software gap with 2 machines (Wii and DS) how could they do better when they have to support 4 machines ?

Also i had Lol for the people stating the super wii will be less powerful than the Ps3. Sure, Nintendo used to do underpowered console compare to Sony: the ps1 and ps2 were so powerful compare to the N64 and Gamecube... For the super wii, Nintendo will likely take off the shelf componant (maybe custom a little) so could get powerful console (more than the ps3) in 2011, 2012 for not so expensive.

Last, for people says, why need more, we have already HD... Are the current console plays most of their games in full HD at 60fps? No, not one full HD games at this refresh rate are really rare, even more rare if you don't count the small XBLA/PSN games. So there still room and use for power improvement, even more with the push in 3D that will need much more power to deliver full HD graphics at 2 x 60fps.

The GC was quite a bit more powerful than the PS2, I also think the N64 was marginally more powerful than the PS1 (I know the N64 could do texture filtering, while PS1 couldn't).  The NES and Wii are the two Nintendo home consoles which are weaker than the competition.

I entirely agree with the rest of your post though

I don't think either HD console will surpass the Wii. But its likely they'll keep eating away at the Wii's market share.

I said no for a few reasons!

#1. Nintendo Wii right now at 200$ or 150$ (Targets new sale price) is on the same price range as the new 360 in some stores. Now at the moment Nintendo has the upper hand technically yet its sales are dropping year on year and Nintendo is loosing market share. Why is that? Simple the market growth is now occuring in PS3 and somewhat with X-Box. Now forget the peripherals their one of my other reasons. Economically the Wii is not as much value for your dollar anymore. The Wii costs slightly less then PS3 and on par with 360. If Microsoft and/or Sony continue to cut their prices say down to 100$-150$ Nintendo will be in a major pickle. Nintendo's Wii was and is largely successful due to its cheap price but what is Nintendo going to do when the competition cuts prices to 100$ which will probubly happen within the next few years. What is Nintendo going to sell the Wii at 50$ or perhaps Nintendo will start giving the hardware away free? Either way if the competition continue to cut their hardware costs Nintendo will get choked out and if the 360 and PS3 aren't replaced for the next five years Nintendo will loose market share consistantly for the next five years and I believe Microsoft or Sony will eventually eclipse Nintendo's over all market share. Perhaps 90-million units sold for 360 or PS3. Even now PS3 and 360 have been securing months as market leader its only a matter of time before those gains become permanent and Nintendo stops winning every once in a while.

#2. 3rd parties. Right now with comments from within UbiSoft  EAGames , Sega , Activision and other studios and independant developers pointing to the Wii as no longer a viable market it is a good indication that Wii's time to bask in 3rd party support is coming to a close. With most major franchises absent from the Wii software market share will continue to drop. Just look at arguably the most successful 3rd party title currently for sale on the Wii (Just Dance) it has shipped 3.85 million copies. But then look at ModernWarFare2 11.41 million on the 360 alone. Now some will argue your pitting the most successful dance game in history (According to VGChartz data) against the most successful FPS in history of course Dance games gonna loose. But fact is Just Dance is far more successful then any shooter on the Wii is, I could use COD:WaW but it only sold 1.53 million. Just face it 3rd party support is dropping and as developement costs become cheaper on the more successful platforms (3rd party wise) 3rd parties will leave Nintendo stranded. I expect if Nintendo tried to last five more years without a new platform in about two years their third party support would be a quarter of what it is today.

#3. Peripherals, Microsoft has the Kinect which sorry MS Fans I believe will fail miserably. But the argument was if Sony and Microsoft last five more years could Nintendo? The only way Microsoft and Sony could last is if Kinect and Move worked. Now I think Kinect will fail because the technology is to buggy and won't be able to be played on the couch or navigated by the flip of the wrist. But if the technology works and Move succeeds then Nintendo will be left without its niche market. Most of the reason behind Nintendo's success is the fact that Nintendo targeted a large niche market (Casual and non-gamers) but once Microsoft and Sony target the same demographics Nintendo looses its edge. No longer will Nintendo be able to market their consoles unimpeded from now on Sony and MS will be their pulling Nintendo's market share down kicking and screaming. Nintendo will no longer have the best new thing on the block the Wiimote becomes old news and Kinect becomes the new hit peripheral with Move taking Nintendo on directly. If Kinect and Move are successful its good night Wii.

#5. Life cycle, Nintendo Of America has a standard five year life cycle one they have stuck to for the most part since the SNES. Going into this generation Nintendo exec's stated they would stick to a five year life cycle while Microsoft talked of four. The origional X-Box cut short its life cycle by a year and Nintendo commented that GameCube would maintain the typical five year cycle. Now if Nintendo kept GameCube alive five years would they not release a new console in 2011?

#6. R&D, fact is the next Nintendo platform has been in development since 2004/05. Miyamoto himself acknowledged at E3 2006 that the next Nintendo console would have full HD. Nintendo exec's then at that same E3 hinted at the next console. Since then Nintendo has consistantly talked about the next Nintendo system. Iwata stated Nintendo's next system will revolutionalize gaming the same way the Wii did. If Nintendo is so open about the next consoles existance and what its capabilities are then we know a finished product is not far away.

Now I say Nintendo would have to milk the crap out of the Wii to maintain dominance another five years. By milk the crap out of it I mean drop the price to 50$ or lower by 2013/14, or give the thing away free by 2015. Nintendo would have to make a new revolutionary peripheral availible to take back its niche market share. Nintendo would also need to remedy relations with third parties and ensure third party titles succeed (A real daunting task).

Chances of Nintendo managing to survive another five years without a new home platform in my opinion is possible (Knowing Nintendo) but highly unlikely like a 98.9% chance they wouldn't be dominant!

So, Xbox360 outselling the PS3 somehow does not have have as much market growth as PS3? What kind of math is that?

And for the Wii to not increase the market, it would have to sell zero unit. Again, what math are you using?

Take off your glasses...

It'll stay in the lead for this gen (lifetime, though it may drop behind in current sales), but 5 years from now, we'll have seen the next gen consoles take hold already, and probably hear rumblings about the gen after that.

I'm pretty sure every system and the bulk of their associated peripherals will be compatible with the next generation.  At this point, not making a system backwards-compatible is damn near the same as flipping off the fans.  One of the biggest complaints about the PS3 (besides its price) always seemed to be how it wasn't always backwards-compatible to the PS2.  Yeah, you have a good point--Kinect, Move, and the Wiimote and all it's assorted crap will all likely be compatible with successor systems. 

I've seen the clip comparing Mafia II's graphics, and to be honest, I think that's pretty minimal--noticable side-by-side, but then, PC is always a bit ahead of the consoles anyway, because PC can be constantly upgraded.  I'm still blown away by some of the stuff I see in some Xbox360 games.  I think it's going to be hard for most to see the graphical improvements in the next generation, unless they all pull off some real magic.  Like, hardcore gamers are going to be able to see the advancements, but average consumers aren't going to see the point in blowing money on the new systems--which is why your point of the consoles remaining active on the market for additional time is important. 

Hopefully Nintendo and Microsoft will maintain their current machines after the successors launch.  Both Nintendo and Microsoft axed their last-gen machines last time, almost immediatly as the successor hit the market.  The NES survived almost two years after the SNES launched.  The N64 was dead nearly a year before the GameCube hit the market.  The PS2 is still available for sale--and people still pick it up.  That system has lasted an incredible 10 years.  Because Sony was smart enough not to just drop it because the PS3 was out.  They didn't alienate their own customers.

i dont think it will, i agree with killiana1a.  the ps3 was developed to last the entire generation. thats why at first it wasnt too popular.  only a small group of people actually understood what blu ray and cell technology was.  in my opinion, i think many core gamers are becoming bored of wii due to the lack of third party game developers.  this is where the ps3 excels more than any of the consoles.  i think the second half of this generation of gaming will belong to the ps3

GC/Xbox/N64 being abandoned so quickly had more to do with their market performance and cost of production than who they were from.

NES actually lasted a solid 4 years after SNES (Nintendo's last published game was Star Tropics II in early 1994).  In Japan, we were still getting new SNES games until 2000.  GB had lifespan that lasted over a decade, and we were still getting new GBA games fours after DS launched... that's how Nintendo tends to handle really profitable and successful wind downs.  N64 was killed because the cost of goods (ie: carts) and 3rd party disinterest, GC was killed because it's market was already dead outside America and those resources were better served going to Wii projects (Zelda TP, Super Paper Mario, etc).

Microsoft's recent comments about 360 (ie" kinect adding 5 years to it's cycle) make me pretty secure in it's continued support for the future too.  Xbox was killed early because nVidia was raping them on licensing fees for the GPU, and MS wanted to put everything into pushing 360 as soon and as hard as possible.

If anything, I'd say PS3 would be the one to worry about most (look at how Sony's utterly dropped the ball with PSP), but with Move being pushed as a new platform and all those massive debts the system has to recoup, I think we're going to see them push PS3 as long as they reasonably can.