The correct answer is the Xbox 360 (see: Final Fantasy XIII).

It's not about platforms, it's about gamers. Nintendo still make money from selling Wiimotes and Wii Sports, and they reach a much larger userbase than before with their games, so they sell more software and controllers.

The main differentiators of the hardware manufacturers will no longer really be the hardware, but what they provide aside from that with services and the like. Microsoft can offer Xbox Live for example, and when they can do that on both Nintendo and Sony hardware, Nintendo and Sony will need to step their game up in that area.

Nintendo will still be selling hardware though. They'd still be selling controllers. And they'd be selling a lot more games (which is almost scary xD).

As much as I'd love to stay up and follow this thread, I have to go to bed now, but I will be back in the morning.

Whatever you say mister japanese wrestler!

OT: Does anyone else have any comments?

Imagine playing Super Mario Galaxy on your Sony hardware. Imagine what Nintendo would do if they could work with Kinect. Imagine how your favorite console game would have sold, if it had opened to the combined userbase of the current generation (154,8 mio. consoles currently).

How would Heavy Rain have sold? New Super Mario Bros. Wii? Halo: Reach? Final Fantasy XIII? Shadow Complex? Alan Wake? ModNation Racers? Demon's Souls? Okami? Red Steel 2? Valkyria Chronicles? Mirror's Edge? Metal Gear Solid 4? Gears of War? Punch-Out!!? And so many others...

How much more awesome would it be, if you didn't have to worry about what hardware you're playing on and could play all the above games on the same console?

umm Sony, Microsoft and Nintendo all working together as one big happy family 

yea right 

Sony still doesn't like Nintendo after Nintendo ditched them for Phillips which failed hard and in which gave birth to the massive success play station 

Microsoft hates Sony since the PS2 destroyed the Xbox 

only dreams, only dreams 

Regardless, you should stay a bit more on topic. Taken from the OP:

I think this model is in place already, its called the pc market. Its pretty close to what you describe. You have anyone who can make hardware, and the innovations come from game makers, any controller can be used.

Lack of standardization for controllers would lead to underutilization of a given controller's featureset in the vast (overwhelming, really) majority of games, so that almost all games would be built to work off of a baseline controller with other formats being a tertiary consideration at best.

I don't think there's any real benefit of a standardized medium as compared to what we have now. Let the people decide what kind of hardware they want, and the fittest will survive.

The PC is not like this though. You don't have the ease of use consoles present by being plug-and-play devices, and not having to worry about your hardware or software for that matter. There's a reason we have consoles in the first place. Not to mention both Mac and Linux being very handicapped in terms of gaming compared to Windows, so your example is hardly all that close to what I describe if you consider the PC to not be one platform, but three.

I don't think a lack of standards in controllers would have that effect though. Controllers would be spread out in different proportions over the entire install base, so developers would have to support a few controllers well to make sure their game is playable by as many people as possible.

Furthermore, I trust that developers would utilize controllers where it makes sense. You're already seeing a game like Sorcery which utilizes Move, and many games on the Wii that do well with motion controls. I don't see how that would change. What I do see change though, is that for example, if a game doesn't play well with the Wiimote, it would be playable with a Dualshock 3 as well and perhaps be better off for it. So less control schemes will seem forced on games this way.

I don't know why you would say that the fittest survives. It's totally true of course, but right now we have three main consoles in play, each offering unique prospects over the others one way or another. But it still means the market is split. This means the issue of what hardware to choose becomes bigger when it shouldn't. It should not be about what hardware you're playing on or supporting, it should be about the games. And if half my friends own one console and the other half owns another, then I (as a gamer) have to make a sacrifice, and choose who of my friends I'd rather play with, not to mention what games I want to play the most.

With this kind of universal console, those issues are eliminated completely. What hardware you're playing on becomes a non-issue. If I meet someone on VGC for example, thinks he's a swell guy and I want to play with him, then I have to be lucky that we both own the same console in order to play together.