Or maybe consumers don't want that and refuse to buy those games. Piracy will be at alltime high. :)

I think that Microsoft and Nintendo don't want to support the Blu-ray mainly because is its the PS3 default format. If they can the will probably use another format. And with its low costs flash memory sounds like a good idea.

Here are some of advantages of using it:

• Dynamic flash size, there are games that need more than 20gb to be stored, but games like NSMB Wii will need only 1 maybe 2 gb, so they can reduce costs by reducing the size of flash memory when possible.
• Power saving, consoles spend less energy to read data from a flash memory compared to a blu-ray disc. 
• Fast loading times,  we can load data from flash cards extremely fast.
• Reliability, a flash memory is lot more reliable than a blu-ray disc.
• Piracy, in a near future everybody will have blu-ray burner, but a proprietary flash memory device can be more difficult to backup for ordinary people (however flash cards like the R4 can be made)

I'm sure that they will use flash memory in the next gen, but I can't deny that it is feasible.

Digital downloads has to be an option for sure but I dont see it being the only option for another 10 years.

I think a combo of manditory hard drive in consoles with dedicated space for running games combined with falling prices of flash memory and the fact that the game budgets and sizes have somewhat stabilized...should be enough to make flash memory work in 2-3 years.

On similar topic, Onlive released the 99 dollar, standalone console for preorder today... http://www.onlive.com/game-system

This is a really good option for people with a decent internet connection and no bandwith limits. I can't wait to give it a go...

It's all good, when it comes to bringing the news, no one does it better than Alfredofroylan!

PSP Go flopped because it was overpriced. We still don't know how well digital downloads are doing on X-box Live or PSN, but on PC Steam seems to be very popular now. I've also started to notice full retail PS3 games are now becoming available to download on PSN on top of older and smaller titles. Also, OnLive will be out soon and depending on the effect and growth it has, a lot of others in the industry could follow suit.

I see the publishers pushing this a lot. It might not be at the start of next gen but I see the transition occuring.

Btw, what generation games?

Companies are already using flash for software distribution. The new MacBook Air comes with the software on a flash drive rather than a disc.

I would like to go to flash drives, they can have a cool design and they don't need either mechanical parts or Internet connections, it's the optimal solution for hardware manufacturers...

the problem is cost, optical discs are cheaper by the gigabyte, and digital downloads are even cheaper, so the software manufacturers nowadays don't benefit from this...

I see next gen as the transition point for moving over to Digital Distribution and/or streaming services. I really see publishers trying to get consumers to purchase DD over physical. Of course, it still all depends on how the market reacts.

The main argument against this I think is expansion into newer and burgeoning markets where network infrastructure may not be able to handle DD/streaming. I'm not sure what internet speeds are like in India and other developing countries, but it may mean physical media remains for a lot longer then I'm predicting here.

And I envy your internet speed.

I'm sure "DR" is that insufferable motherfucker David Reeves, but since the OP doesn't specify I'm just going to pretend this was an interview with Dead Rising!