Well is MS dropped out, then the logical step would be for those people who were gonna purchase a 360 to move over to the PS3...after the existing owners brutally burn MS to the ground and developers shoot the majority of the MS gaming division for their wasted time.

You mean houses right?  2 hotels is cheating.

I'm pretty sure they still make the cards, actually.

If Nintendo dropped out, following generations would seriously lack innovation. From the controller, to the power-pad, to the analog stick, and the wii-remote, Nintendo has never been satisfied with simply giving us better graphics and faster processors.

If Sony dropped out, there would be a hole in the functionality department. The PS2 brought DVD playback to the mainstream, and the PS3 will do the same with Blu-ray (eventually). The PS family was where 3rd parties really shined. Not so much now, with XBOX 360 on the market, but the competition between the two keeps cutting edge technology at an affordable price.

If Microsoft opted out, PS3's would still be $300. Also, the system(PS3) wouldn't be as powerful, and the PSN online component would no longer be free, or robust.

Pray to your respective video game god that none of the big three ever leave without an adequate replacement. Whether you like a company, or not, we need them to exist.

^ Wrong, PSN would still be free but it would suck ass. Also, don't you mean "still $600"? It's not even at $300 NOW.

The only company that could possibly drop out at this point but won't is Microsoft.

- Nintendo's fortunes are in gaming and both of their systems are doing quite well.
- Sony used the PS3 as their shoehorn to get Bluray into homes. The PS3's death would be viewed as a sign of weakness for the format. And the company needs the revenues from their video game business. They aren't as strong as they used to be and the electronics business has been brutal to them over the past few years.
- For Microsoft, the video game business is a side job. Heck, in the long term scheme of things it's been a charity case. While they've had a few recent quarters of profitability, the entire division has been a drag on performance ever since the original Xbox came out. If they decided to leave video games, they may appear a bit weak but wouldn't be too worse for wear since they still have their operating system and software business lines.

But let's continue and say that MS leaves the console space. I'm sure they wouldn't abandon gaming altogether. Rather, they'd either team up with someone they didn't see as a threat to their bread and butter operations (maybe Nintendo) and/or try to refocus consumers on PCs and Smart phones (portable gaming).

Nintendo owns Seattle Mariners (Baseball team)

I think this thread can really offer us some help with the constant fanboy stuff, to help us realize what everyone brings to the table. To be honest, I think the hit would be least felt if MS left, especially so if Atari (read an article in which the CEO said they were biding their time and building capital...) or Sega (my preference :P ) took their place. Or is two good enough, haha :) .

Having a three-way competition is beneficial on some level, even if one underperforms considerably compared to the other two (see: Sega Saturn vs. PS1 and N64). Even back in the NES days, there was a three-way competition (NES vs. SMS vs. Atari 2600/5200). And as MS was happy to show when Sega dropped out, there's always somebody willing to step in and fill the void. So losing Sony or MS would probably not have much long-term impact, because somebody would step up and fill the void before long.

Nintendo, on the other hand, is synonymous with console gaming and has been since the Famicom was released; they're the only one that's stuck around for this long. Their dropping out of consoles would have a profound effect on the market in the same way that dropping the discus toss from the Olympics would impact fans of the Olympic Games. Even at their most unpopular, Nintendo was still the first name that came to mind for many gamers when referring to console game companies, for their sheer longevity.