I was thinking about this on the way home. When the PS4 and 720 come out, how will MS compete with Sony's box?

Sony has paved the way for the future of the PS. The Cell and distributed programing. The beauty of this, is it scales incredibly well. As the tools to use the PS3 Mature, they can easily be utilized on a multi Cell CPU design. This is just a guess, but the PS4 will probably just have a few Cells in it. It's very power efficient, and by the time the PS4 comes out, should be relatively cheep to make. plus, if you use Cell CPU's, you can BC to the PS3 easily.

Now, what will the x-box use? This is something expected in 3-4 years. the fastest Intel or PPC CPU released in the next 3-4 years will not compete with 3-4 Cells. It will also cost a ton. Whatever MS does, it won't be cheap, and it might not even come close to the performance on the PS4.

The PS3 is the beginning on the technology is represents. The X-Box is at the end of the life of the technology is represents (the PPC).

I think this might be MS's biggest hurdle for the future for its console gaming devision.

Well who says Microsoft won't come out with something much more powerful than cell? Your argument makes no sense whatsoever.

Like what? They are not developing any CPU's at the moment, so they are going to have to buy something. 

Maybe Microsoft will just use the Cell??

Toshiba and Microsoft have had a pretty good partnership so I wouldn't see why not?

Both Xbox's so far have simply been specialized gaming computers.

That said, MS is not stupid--they are in this for the long run and will provide hardware to match.

ps4 sounds crap

I'm pretty sure both Nintendo and Microsoft will use GPGPUs on their next machines. Cheaper and better.

Well, Cell development began in 2001 and cost $400 million, so MS had better be hard at work.

In fairness though, it's not like MS won't be able to find some sort of equivalent by the time the next-gen rolls around. 

 True, but Sony might own the rights to use it in gaming consoles. Who knows that contract they have with Toshiba. But if not, that's a good point.

 It be pretty funny if toshiba created brand new CPU for the 360 based on the Cell's technology... Muahahah!