Interesting theory. If what you say is true, that consumers are going to stick with the PS3 & 360 to play their games, then how would you explain the growing lack of interest for the PS3 & 360? Last year saw a huge drop in software sales and this year will be even worse. It's especially bad for new IPs which at this point in time have little chance to be successful unless it's associated with a well-known brand. Software sales and hardware sales are dropping hard; consumers want new experiences. They're tired of the PS3 & 360.

These signs suggest that consumers are definitely losing interest in the PS3 & 360. This loss of interest could be explained by one of two explanations. (1) Either this apathy is cyclical in nature and will disappear next generation, or (2) as you say, tablets and ipads are taking over. I would bet my money on the former since that's what history has proven time and time again. The assertion that mobile gaming will cause a major blow to the console market is really unsupported at the moment; we'll have to wait and see.

Though I personally highly doubt mobile gaming is going to put a large dent in console gaming. Until ipads and tablets can effectively produce experiences like Call of Duty, Grand Theft Auto, Assassin's Creed, etc., people are going to flock to consoles for those experiences. And at the moment, tablets severely lack the controls and online interfaces to produce such experiences. 

So I can't see tablets or the PS3/360 being harmful to the PS4 & 720.

No. Going off of rumors of course Sony is set to do great. It should be fairly more powerful than the 720 yet could cost Sony less to manufacture, especially if Kinect 2 is included. It will also be much simpler than the 720 to push to its limits. This means 3rd parties might do the reverse of what happened this gen. Microsoft can have the casuals (and get rich doing so).

Tablets will be a hinderance to the PS4 and 720, but not in the way people think.  Let's say you're a 15 year old kid who is a casual (read: Call of Duty casual) gamer.  At Christmas time or his birthday he's going to have to choose, do I want a PS4 or an iPad?  He's not going to choose the iPad because it's a better gaming machine (unless he's an idiot) but he might want an iPad more  in general.  The fact that tablets are #1 on many people's christmas list is going to be a factor.  I'd go into more depth, but in short, every other entertainment product is in competition with the PS4 at some level, and since tablets are the most popular electronic device, that's why I see them as competition.  Not because of their gaming value.

As for why the PS3 and 360 are slumping, you explained why.  What were last year's big releases?  Halo 4, Call of Duty, Assassin's Creed.  These games are going to appeal to existing fans, but they're not going to draw in new gamers or energize the industy. Towards the beginning of the generation we saw new franchises like Wii Sports, Uncharted, Dead Rising, Saints Row, Modern Warfare (sort of new), Assassin's Creed, and even things like Rock Band.  That's what typically happens when a new console launches.  Plus, we had much improved online modes and HD graphics (for X-Box and PS3), and motion controls (for the Wii).  There was a lot of exciting stuff going on.  Of course, for the X-Box 360 and PS3, most of this stuff happened a bit further into their lifespans, which is why they both were a bit sluggish at first.

People are bored with the current generation.  That's true, BUT I think they're bored with the software, not the hardware.  Wii fans are bored with the Wii, but they're not flocking to the Wii U because the Wii U doesn't have compelling software or features at the moment.  New hardware alone isn't enough to make people excited, it takes great software too.

That's why I think the PS4 and 720 are going to have problems with the PS3 and 360.  I think a lot of software, like the next COD, will be intentionally held back so that it can play on the 360 and PS3 as well, and that's going to prevent the PS4 and 720 from really having must have software.  I personally don't expect the PS4 and 720 to have a huge step in graphics, certainly not as big as the jump from SD to HD.  Combined with intentionally gimped software, this will post a problem.  I don't think we'll have a huge jump in online functionality either. Because of this, I dont see an immediate reason to go from PS3 to PS4 for fans.  The industry, sadly, will slump for a little while.  I don't think we're going to see the big jump that will jolt the industry.

The must have system pushing software will have to come from Microsoft and Sony, because they're the only ones who have the incentive to spend millions and millions on cutting edge next gen exclusive stuff.  These products will be the ones that reenergize the industry (or not).  After a year or so, when Microsoft and Sony have gotten the ball rolling on the shift from PS3 to PS4 and 360 to 720, that's when we'll see developers making use of next gen optimized games, and that's when the industry will kick up again.  Not counting the Wii U, which should be able to get rolling before then.

Overall, I think the situation is going to be a little bit like the Wii U situation, or more aptly, like the PS Vita situation in Japan.  Third party developers (MOST of them anyway) will not be eager to leave a 70+ M install base for a 0 install base.  That's why developers are still developing lots of stuff for the PSP, and limiting their Vita output.  Unless Sony can create some stuff themselves that will make people buy the Vita, third parties aren't going to go balls in. 

This is why some of Sony Developers registered "PS4 domains" for their new Next Gen games...



The PS4 will dominate.
Sony is doing a lot for that right now.
The PS3 had following problems...

a) a complicated architecture.Except 1st/2nd Party and some Sony Fanboys among the 3rd Party no one of those unskilled Developers learned to use it really well.The 360 was easy to develop for cause it was pretty close to a PC architecture.
b) the price was too high for all the jobless people
c) It came 1 year late - Enough time for Microsoft to throw around money.Especially at Japanese Developers.
Especially here you could see after 2008 all of those favored Sony again but it did hurt them cause they didn't have their usually stuff from the beginning.
d) They had problems with the online service.PSN was inferior to XboxLive.Right now in 2013 no one can deny that PSN+ is far superior to XboxLive.
e) Microsoft did hit the taste of the USA pretty good.Somehow after 2008 it was enough to survive with CoD and Halo for the most time.
Sony did win 11/12 months - Only the month those games got released helped Microsoft to catch up the sales they lost in 11 months of the year.Kinda sad if you ask me.

But this will all change or stay the good way.
The PS4 is losing its complicated technology.As it looks now its even using nearly the same stuff the NextBox will but only stronger parts.Is securing the 3rd Party support cause it will be easy to develop for.A lot of 3rd Party switched in the last few years over to PS3 Leadplat anyway cause you can sell stuff better there if it isn't from a mainstream genre.And it was easier to port from there to the 360.
It won't cost that much - They will be pretty close together and as it looks they will release early/at the same time.
PSN+ should increase its quality and it will be hard to counter that.
The 1st/2nd Party is already working on PS4 games as we know - Some of them even with 2 teams on 2 games(sequel and new IP).They will have games ready before 2-3 years have passed and a PS4 Slim arrives ~.~
To take back the USA probably won't be possible cause CoD and Halo are confirmed for NextGen but they will come a lot closer this time.They will get stronger in Europe and Japan is theirs anyway.
Microsoft won't be able to convince the 3rd Party Devs all over the world to go exclusive for them like they were cause of all those factors.
They did that cause M$ did spend a lot - The PS3 was expensive and had a hard to learn architecture not everyone could afford to waste their time on.
Games like Tales of Vesperia showed already in the 360 version they planned the game for PS3 but couldn't afford it as they confirmed after the PS3 release of ToV.

All those factors will help Sony a lot.
And as it looks like they try to change their marketing efforts too or at least start some*g*.They made a lot of mistakes with the launch of the PS3 but as it looks like they continue with the rising form they have since 2010/11 where they reign as a single emperor only getting a hard time on the special month of the year ;)

Great stuff. Completely agree.

Microsoft and Sony will have to contend with the popularity and versatility of their previous generation consoles.

What an excellent post. I'm glad I recognize good posters and that I asked you to join.

Since MS waited too long and WiiU can still pull a 3DS.......it really is anybodies game now.

Sounds about right if you ask me; only difference is that it won't peak as high sadly.

I don't think so

That is true to all Playstation products, slow to start, gradual increase of sale. The reason I guess is that they support two generations at a time.