Launching before them last time cost them billions in damaged image, sales, and console replacement.

I also disagree with your assessment on Sony's release schedule. You think something paltry like costs will keep Sony from making moves? Should I remind you they just spent 650M$ on Olympus? Costs don't bother Sony. If Sony believes that the 360 will negatively affect them to a significant extent, they will proceed with release.

Why do people keep saying that ps360 show no signs of slowing down? Thy are both only a couple million above Wii for the year and have double digit YOY declines. They are on their way out too. 2013.

Who says that?

They are definitely slowing, the question is "at what rate". They are down 20% and neither have received price cuts.
That's not very impressive. At 20% rate drop every year, we're looking at another 18 million each over the next two years not including this holiday. At a 30% and 40% subsequent, we're looking at 14m over the next two, not including this holiday.

Q4 2013 is not as obvious as some might think it appears. There is still a lot of money to be made.

Contrast this with the wii, which lost 40%, then 60%. 20% is not so bad, especially when both are still coming out with blockbusters and could each receive pricedrops.

Hardware is aging slower today and making HD games seems to be already expensive and time consuming as it is.

Why would anyone make things even worse by releasing dedicated next-gen hardware now? It's not even worth it, unless you want "599USD" and "Console X has no gamez" shit all over again.

I believe too that MS and Sony have more or less agreed on launching simultaneously in Nov 2013. It makes sense for both parties and the big publishers.

I'm gonna go a head and predict that some piece of hardware is gonna get shown at e3 2013 and launching in Q4 2013. The last console to launch will at the very latest be launched in Q2 2014 and will perform the worst

Sony often said that they are following a 10 year plan. The sales are slowing, but are still not that bad. There are still enough games coming out and the installbase is very high.

I think that both consoles will have a hard time in getting people to "upgrade" their system within the first two years. There will be no significant Software and the prices will still be high. It is the same with the VITA. I bet that there are many like me who are just waiting for the first few really big games or the first price drop before they buy one (I can still pick up the Uncharted Game next year). The sales of the 3DS picked up just after the first price drop and more Software releases.

Apart from Fandom there is no real benefit in being an early adopter. You just pay more to get the inferior hardware just to be able to play a little earlier. My launch PS3 went Ylod after 3 Years and I would have been better of if I bought my PS3 when they introduced the slim... I will not make that mistake again. And many early adopters of the X360 may have similar feelings after the RROD desaster.

To be honest, I could spent two more years with my PS3 and I would still enjoy gaming. There is not much room for improvement for the "not so Hardcore" gamer and I think that the next generation may really be the last one... but just because it will last for a very long time.

There is still money to be made but with another 20% drop (at least) in sales for PS3 and X360 in 2013 those are simply too small sales to continue without also launching a new, fresh generation.

Just ask yourself, of all announced upcoming games that look current gen (Tomb Raider, Bioshock Infinite, GTA5), why are they all slated for Spring 2013? Meanwhile the games that look next gen haven't got any release dates (Metal Gear Ground Zeroes, Star Wars 1313, Watch Dogs), namely because next gen consoles aren't officially announced yet.

Why is Sony planning to release The Last of Us, Beyond and God of War Ascension all in Spring 2013?

Similarily MS has got Gears of War Judgment planned for Spring 2013.

Why release all these big current gen games in Spring 2013 and none in the Holidays of the same year? It's all because the PS4 and Nextbox will release in Holidays 2013.

I doubt either Sony or MS are in any sort of rush considering they still make a pretty penny with minimal effort. It's as though they're both in agreement not to drop their prices and maximize their profits as much as possible. Crysis on PC back in 07 still looks better than anything on current gen consoles but no one was too fussed about it, current consoles are still quite capable of producing good looking games if Halo 4 and Last of Us are anything to go by.

Waiting until the tech is there to do a big generational leap in compute power at a reasonable price most likely. That and sales haven't been all that bad up until now.