First, no - that there's a lot of startups is irrelevant. Startups involve new investment (oftentimes by "hardcore" developers who think they'll have a better shot on their own), studio closures happen because of massive loss of money. Since the issue at hand here is loss of money, not lack of investment, the number of startups isn't relevant to the issue.

And clearly you haven't read what has been said regarding why the developers all seem to try to max out the graphics, and why that drives up development costs for AAA titles. Now, what evidence is there that developers don't try to max out the graphics? Look at them all. Graphics is the big point of comparison between titles for most developers, with gameplay features coming a distant second.

Also- the leap from standard definition to high-definition was a larger leap forward for graphics. But now the leap from UE3 to UE4, or from one engine to a slightly improved version, really doesn't look that much more impressive. The big leap came from going from standard definition to high definition, when people replaced their old tvs with new hd tvs. That was the big leap that really made things look more impressive, but as far as i can tell i don't think the next major leap will come until they improve the displays drastically once again (maybe something like an ultra-hd glasses-less 3D tv)....but that ain't coming for a long while. The 720 & ps4 will more than likely be comparable to the graphics on the wii U, I believe this because micro & sony don't want to lose tons of $ on hardware anymore (sony just CANT), and the developers just can't handle the costs anymore.

important or not doesn't change that the industry is growing... between 2006 and 2009 it went up almost 10% a year in growth the hirering rate was higher than the US average especiallt after 2008 and was the highest in the entertainment sector.... so yeah some close but the industry is not in trouble at all.... i don't have more recent numbers but i doubt the trend turned around in 2 years.....

VG is the 21st century movie industry... a ton of studio will be drove in the ground but over all the industry has plenty of years ahead to strive..... you have more players than ever and will increase a lot in the next decades and technology will be the main drive of it.... because people will want quality, easy to consume on the fly and everywhere of a wide choice of experiences.... people will play from birth to death on the descendants of today's console/handheld devices/computer/augmented reality glasses.... etc.... I'm absolutely not worrued about the VG industry as a matter of fact I'm actively looking for a job in the sector....

oh and when i said nextbox ps4 will crush the WiiU i was talking about specs and various accessibility stuff on the extra/media side.... not the sales results... before peeps get mad :D

I will disagree on accessibility and extra/media, its certainly possible Sony wants to continue their track record of selling hardware at a loss, but I doubt MS will follow that path specifically because I believe MS is no longer aiming at the gamer, but at being the center of the living room, and price will matter there, so sure, there may be more graphical power in whatever Sony does next, and likely what MS does next in terms for video games, all other things should and will likely be realitively equal, there should be plenty of streaming video offered, surfing the net and other capabilities from all three devices, subtracting
blu-ray, what peice of missing equipment in a console is going to make it more capable? It will be content, and content will come to all since that is how content producers make their money.

hmmm highly doubt that.... nintendo is light years behind what MS has already right now in the US plus world wide.... and then there is no doubt next bix will be in the same eco system than windows 8 and there in terms of API and media consumption available it's game over.... even sony will have a hard time to keep up.... 

I am curious about how big a leap the next generation of consoles from Sony and Microsoft will be on a graphical level. The current generation of Sony and Microsoft consoles had an outside hardware boost to get them the large leap we see today. But there is no outside hardware leap this time around so how much more can truly be squeezed here?

I think people forget that in order to get to 720p/1080p resolutions, it took television makers to get their televisions capable of outputting that display. Without a boost in hardware like that, is the next generation offerings from Sony and Microsoft truly going to be as large as people are hoping/expecting?

If it is, I will be extremely intrigued as to how they do it.

So using Nintendo's logic, will there be a graphical leap between PS360 and WiiU?

Its hard to be convinced of anything regarding a system that doesn't exist yet.

It goes without saying that graphics will just be an increment of what's available now, as per the PC. For example, the tail of Xbox vs the launch of 360 wasn't so massive a jump. I'd say that the increased spec will be more advantageous below the hood, for enhanced physics and environment, possibly leading to new gameplay innovations.