It would be risky business to release another successor right away. Microsoft didn't have any other choice because of their dilema with Nvidia. Not only that, but Microsoft also wanted to steal Sony's thunder from the PS3's release. Due to that move, Sony wanted to release the PS3, but delays due to manufacturing troubles had halted that process, so they had to wait a bit and sort out the problems. I think after the X360's release, some consumers were mad that a lot of the original Xbox games weren't compatible with the new system.

Everything boils down to risks when releasing a product. And taking risks is a big gamble. Anything can waver in life, let alone a product or business plan.

Here's another thing; if Sony is going to stick to the 10-year plan with the PS3 system, they will get a bit screwed over in the next few years if Microsoft/Nintendo decide to release another system that is more than capable than what the PS3 has. It's true that the PS3 would be down in price at that time, but technology ALWAYS improves and nothing is totally future-proof (graphics cards, processors etc.). Yet, Sony still has Blu-Ray and the Cell, and both are still an advanced form of what's out on the market with technology, so it will be future-proof for the time being. But things will improve. Once the next consoles roll out or are planned, all three companies will try to scramble for some means as to make their systems different from the competition. It's really interesting if you think about it, seeing what they have in store for the consumer.

I'm really looking forward to what each of the three companies are going to offer in the next few years in terms of technology. It's like betting your money on a horse race, not knowing who is going to win or what will happen in the race.

Being "the most powerful CPU used in a gaming console" is expected being that the PS3 is the newest high-performance console on the market. Being that you're a software developer you should realize that the "amazing" performance of the Cell (and any distributed system) is largely theoritical, and the more parallel processing units you break an algorithm into the more waste there is in a system.

 The DC was more powerful then consoles released after it. Same with the 360 (with respect to the Wii).

 As for the parallelizing algorithms, yes, you gain waste. But you gain CPU cycles/time when you do it.

So if you could have a single CPU with the same power as all the SPE's in the Cell, you would get a lot more performance out of it. But being ray-tracing on the Cell can be as much as 30 times faster then the fastest single core intel CPU ever made, I think it's OK to take the hit ;)

Please, never work on a project I am working on!

You seem to have very little understanding of the difference between PR bullshit and what really matters. Having built several raytracers when I was in university, I can tell you that Raytracing performance is largely dependant on the choices of intersection tests you choose and the datastructures you use to limit the number of intersection tests you have to perform. The Cell processor doesn't offer much in the way of a per-clockcycle improvement in the intersection tests performance, and offers little to improve the performance in managing the datastructures; it does offer parallel processing of the intersection tests but the performance gains will mostly be limited by the loss caused by load balancing across all the threads.

In other words, the only reason they can make a claim like this is because Intel, AMD and IBM haven't made a single core processor in several years ...

 Not exactly.  Most people don't realize just how modern the chip is.  Think of it like going from an Intel Pentium 3 (GC) to a Pentium 4 (Wii) with an even bigger decrease in fabrication die shrink.  A P4 isn't just a faster P3.

Realmofo, the CELL is one of the best chips currently at many "specific" tasks. Put it against my Core 2 Duo for many general purpose tasks and my C2D will wipe the floor with it.

You cannot just assume that because the CELL currently leads in certain tasks that its product line will always do so. That's a preposterous notion in the world of chip technology.

What is most amazing is the fact that the cell and RSX are meant to work TOGETHER!!!!!
THis isn't 1998 or whatever(X machine was the most powerful during such gen).... There is at least 3 or more times as many developers as there was during the saturn and GC era...... Most of them alive today because of the PS2 and nintendo systems. Look at what Uncharted, R&C, Resistance, Motorstorm, and many others accomplished in it's first year in development!!!
Uncharted using 30% of the system and still being argued as the best graphics this gen.... Imagine when 60% or more is used!!!!!
The next 3 years will be a wild ride.
It's just too bad that it will always be compared to the wii when the PS3 is twice as expensive and has 10 times the picture quality.

We may as well start to compare the Ford Focus with the Mustang.

 Well actually, the earlier P4's were slower than P3's, and your forgetting that the Wii uses a chip derived from the Gamecube chip, just 50% faster, so to That Guy, no its not twice as fast. To Viper, the chip is by no means modern, its a very old chip as far as CPU's go, its old technology, and thats why its cheap.

More importantly, I wonder how the hardware issues of the 360 will impact the launch of the 720. I know I was wary of getting a ps3 at launch because of the ps2's issues, but I broke down and got one anyway. The 360's issues, from what I can tell, have been a good bit worse than the ps2's, so I think they may impact the 720 console a little more.

Its pretty much a given that the PS4 will be more powerful than the "720", the only question is...what will it cost?

that was the big problem with the PS3.