1. The next generation. What's taking so long? Hmm Mr. FudgePachter says "sales will continue to drop until new consoles are released". Genius. Now let's talk about what's going on. I believe that Sony and MS have agreed to delay their next gen.
Reasoning:
1: MS is making a killing on the 360. So much so that they're literally giving them away at every chance. But seriously, why would you release a game like halo, only to cannibalize its sales by releasing a new console?
2: Sony is still just trying to catch up with their finances.
3: Without an announcement from tgs, the earliest we're looking at new consoles is 2014.
4: Why release a system against the WiiU when you can wait 2 years and up your graphics, sony and ms love their graphics power. The fact that this gen has gone on so long could be attributed to the wii's "distraction factor". This is supported by the fact that ps3 and 360 only increased in sales as wii sales fell.
5: There's no point competing with what will likely be a very successful core console in the wiiU. Let it compete against dying consoles.

Ok that's enough. Final thought, I believe MS and Sony have agreed to hold off releasing new consoles. It could be unspoken, but it's common in the tech world between competitors.

I fear you are correct. :(

2013 Q4 holidays

I can see Sony delaying the PS4, but not MS. Their are a bunch of rumors about the new xbox (even though their are only rumors, we should take them into consideration), MS have also already trademarked "Xbox 8", this doesn't mean they will launch anytime soon, but it's something we should look at. They will not delayed the system, we'll see the next xbox at E3 2013, I can bet anything on that.  

you could be right. But that is risky on their part. letting nintendo alone all that time.

ms is going to release in 2013 and Sony said they will not be last out this time

Statements like these used to be preceeded or followed by the phrase "at the latest", and slowly, gradually, have come to read "at the earliest".

Factoring console and development delays, not to mention the introduction of new peripherals and improvements, on top of what is still 250$ price tags on both sides, say that the gen could easily be pushed further back.

Editted for clarity, added "delays"

While it is risky, it could also be considered strategic. It may be a poor strategy, but I digress.

You're right about Sony and M$ wanting to get the most out of the PS360 which are both doing very well with no signs of slowing down, while simultaneously wanting to make sure their successors are as powerful as can be without launching at ridiculous prices ($399 is the most these new consoles will cost at launch).

But as for mutually agreeing to hold off on the next gen while concentrating on their current consoles for the time being? No way... this is just how things have happened to play out for each respective company, and it is just a coincidence that neither is quite ready to launch a new console just yet.

M$ wants to get their next console out as soon as is fiscally and reasonably possible, which is most likely Q4 2013. They do not want to give Sony enough time to be ready with the PS4 and lose any advantage they may have by launching before them, while at the same time giving Nintendo more than a year's head start if they fail to launch by holiday '13. The Wii U might be competing with PS360 now, but as soon as developers shift focus to all three next gen consoles, you can bet it'll be right there in the thick of things with the 720 and PS4.

And Sony on the other hand is in a tough spot financially, and with the Vita underperforming, the PS2 now dead, and the PS3 their only console keeping the company afloat, launching a next gen console within the next year is going to be virtually impossible for them, so it's more than likely that we won't see PS3's successor until at least Q2 2014 at the earliest.

I fully agree with that.  We may be 7 years into this console cycle, but we're still getting tons of amazing games across the board that continue to impress, and thus getting tons of value for our investments that we've made this gen.  I know many can't wait for the next-gen to start because they just want a new shiny piece of hardware to play with, but what good is it if it's going to cost you another $400 or more while doing basically the exact same things that your current gen system can do, just with marginaly improved visuals?