There's a lot of speculation that MS/Sony will now have to launch new systems to compete with (rumoured) Wii2.

If the rumours are correct, the exact opposite may be true.   It could extend this current generation's life.

As the Wii2 is only rumoured to be a little more powerful than PS3, it in no way makes the current HD consoles obsolete.  Fact is, 3rd parties will merely port over games already in development to Wii2, without needing to pull away any resources from the HD twins.

Moreover, MS and in particular Sony, only recently started making money after losing billions initially.  If they were to react by going to yet another generation both would wipe out any chance of having been really profitable this gen.   Both, and Sony especially are better served sharing 3rd parties games with Wii2 and Sony in particular allowing it's very strong first party line-up of games to differientiate it from Wii2.   Fact is, Nintendo's first party and Sony's first party largely appeal to different people.   MS lacking a lot of exclusive content nowadays would need to rely on Kinect more but could still remain competitive and moreover - profittable!

 Nintendo could continue support on Wii (similar to how they did NES looong into SNES life) porting games from 3DS to it and vice versa thereby supporting both without needing more studios to do so.   A $99 Wii could be focused on attracting ever more non-gamers to games with games like Wii Relax while Wii2 acts as a logical next step for Wii owners wanting to 'upgrade' to HD and more 'core' experiences but offering the best of both worlds (Casual/Core).

In this respect Wii2 competes effectively with PS3/Move and 360/Kinect while maintaining it's distinct Nintendo flavour.  There's simply no reason for Sony/MS to push into a new generation.   The current one continues as long as all three remain profitable in it.

Furthermore, if they were to goto 720/PS4 what would that look like?  They both just introduced new controls, so the next step would have to be more power.    At this point we've hit the point of depreciating returns for graphics (as proven by Wii outselling them for years).  Being prettier and handling even more on screen action wouldn't make for very much difference in gameplay all in all.     All it would do is make their systems either: A) expensive or B) Huge loss leaders again.     I doubt very much Sony can possibly afford more years of losing money on SCE and even MS shareholders have their limits (although I'd expect MS to be the first true 8th gen console)

As is, Sony and MS would both be better served continuing with their current systems for another 3-4 maybe 5 years.  Once those new systems do finally come out, Nintendo would shortly follow with Wii3 (a year or so after and still 4-5 years after Wii2).  This means Wii2 is probably not the start of the 8th generation.    The 8th gen will more likely imo be 720/PS4/Wii3.

Ironically, this makes Pachter right for once.  Wii2 is his long promised WiiHD not the start of a new gen.

but wii 2 is going to gain sales. wil ps3 and 360 will just keep going down. and when ps4/720 do release they will be competing with a platform that has a huge base. 

if wii 2 didnt mean ps4/720 then nintendo woudnt release it so soon,

Fact is PS3/360 are enjoying their strongest sales.   Will a Wii2 change that?  Somewhat sure.  But they can remain profitable staying as is.   Reacting by introducing new more powerful systems would wipe out profits.

Nintendo decided to not make Wii (current wii) HD because HD wasn't in enough homes at that time.  That's clear indication they always intented to launch another system in 5 years (as they've always done) which they are doing now.   It's MS/Sony who wanted to go for 10.   And as is, there's no reason they shouldn't.

if wii 2 is going be more powerful then the hd systems, and if its new controller is going to bring it wii like sales, then ms and sony have to release another platform. 

This will be the first generation that Nintendo is first to draw the gun. Sony sales are already on the decline year over year; and both systems will see excellerated loss as the Cafe comes into existence.  Particularly if it has a price match.

If Nintendo manages to get the price right, you can be guaranteed that it will be more advanced than the PS3 and Xbox 360 in every way. On top of that, the Nintendo namebrand is the most powerful; so far this generation 235 million Nintendo systems have sold between Wii and DS - also 1.35 billion pieces of software.

Essentially, the Cafe is a death sentence for the PS3 and Xbox 360, and the longer the successor consoles wait, the more difficult it is going to be for them to succeed in the coming generation.

Of course, all this matters on Nintendo's price; if they pull a Sony, they could see themselves doing as poorly as the PS3 has done this generation.

as everything right now is still rumors i think it is pre-mature to do any in-depth analysis...

however, if the next nintendo hardware truely is only on par with the ps360 from a horsepower perspective then yes, ms and sony won't have to make a new console any time too soon.  as you said in your first reply, the ps360 just came off their strongest years.  

either way -- i don't see sony or ms going more than another 2-4 years before releasing their next whatevers meaning the wii HD life could be cut even shorter than the wii.

Both PS3 and 360 had their strongest sales year ever in 2010.   It's too early to say how 2011 will fair, we'll know better after E3 but regardless, there's a ton of life left in both HD consoles.

I believe what is relevant here is that whatever next generations console do, it has to be more than just improve the graphics.  There has to be features people would want, that are missing from the current generation of consoles, for it to be justified being done.  The approach will have to be what Nintendo does, that being that game developers want to do things they are not able to with the current generation of technology.

You could be right, but as I mention, as long as all three remain profitable there's little incentive for Sony/MS to jump into another loss leading console race.    Even if they do wait only 2 more years (2013), Nintendo if 'Cafe' is anywhere near as successful as Wii,  can wait 5 years again.  It's not like they need to compete on power, we know that.  It's highly unlikely Sony/MS would match that with yet another console in 2017/8 unless they completely change their strategy from what it is today.    

Since it isn't about power (Vs Nintendo) Wii2 isn't a compelling reason to move into the next gen.   If 360 starts to drop consistantly and MS can't recover, then they'll move into the 8th gen and Sony will relunctantly follow but that would happen regardless of whatever Nintendo is doing.

The next MS/Sony consoles can't arrive for at least 2 years, because they were just put out for complete rebidding according to Charlie at SA (very reliable).

Also none of them use an Nvidia GPU.