What he meant to say (I think) is that MS, despite being in the hole, are now making a profit (meaning they aren't losing money on each console sold).  In fact, using your point of the 6 billion, what would be their incentive to get out instead of trying to make it back?

MS would never merge with Nintendo or Sony.  Sony is their chief rival.  One would have to approach the other about it.  Even if Sony lost this gen to MS, they'd be too proud to do it.  MS has way too much cash to be in much need of them, and they couldn't pay Sony enough to exit the business.

As for Nintendo, their views and MS' are WAAAYY too different for them to gel properly.

I could see Microsoft and Apple merging on the next Xbox, tho--Apple makes good hardware (as they like to flaunt in their awesome commercials) and they know how to make things user-friendly.  Their products also have managed to do well in Japan.   Combine that with MS' excellent software development, great negotiating skills, and the Xbox brand name, and you have a real contender.

Also, barring some type of natural disaster, Nintendo willl never, EVER stop making systems. It is the ONLY thing they do--it's not a division that they can just drop. Yes, Sega was the same way, but they are much more knowledgeable about the industry than Sega was. They are not dumb enough to release a console every year, they know how to make a profit even when they lose a console war, and come on, it's NINTENDO!

Could you imagine a gaming industry that didn't include Mario? Didn't think so.

 how is it a fad? Ninty has been in the bizness for longer than MS and Sony!!!! Therefore, if any company was a fad, it would def be wither MS or Sony

Btw another question just arise in my mind... could it be that another company jump into the console bzness while none of the existing one exit... like somebody mentioned Apple...

or do u think that the console bzness is already too competitive for another player to enter while these three are fighting it out.

Not one of these companies is ever leaving the gameing industry, and no ther companies will ever enter the console hardware market on a standalone product. A one console future is inevatble if the industry wants to survive. The only real question is when does this occur, and what plays out in the mean time? The most likely scenario is that Nintendo will merge with Sony at the end of this generation. They don't want to compete on a technological level anymore, and it is in their best intrest to stay out of the hardware side of things. At this point I see one more generation of MS vs. Sony before we go to a single standard. This is were the games will really begin. A sigle format with boxes made by all of the CE companies of the world. This is the future Jaffe and DD have talked about. The only sensable direction for gaming to go.

Imagine, no more console wars, just games. Innovation has no ends, and to thouse that dissagree please explain. Why would it have been imposible for innovation on a single platform this gen? If Blu-ray would have been the face of Music, Movies, and Games for this generation, what would have stopped innovation?

Here is how it works:

-A Gaming Organization is formed. (Sony, Nintendo, Microsoft, EA, Actavision, THQ, Ubisoft, etc.)
-They come up with a single standard for the hardware. (A minimum for all players power, input/outport requirments, Online, etc.)
-CE companies produce the machines in the same way they make DVD or Blu-ray players.(great profits for the hardware guys)
-All publishers/devs create for one platform, making all games optimized to their fullest.(Saves costly ports, high quality games, more risks)

If this was the case everyone would win. Say that console supported any type of wireless input. What is stoping Nintendo from packaging a motion controller in with a game the likes of Wii Sports? Nothing. No were would anyone ever say, no you can not put out this working game with a working controller on this open platform. Innovation would not die on an open platform, that is the exact opposite of the real outcome. Were this to happen innovation would thrive greater than ever before.

In conclusion, Microsoft and Nintendo will leave the Harware buisness. Samsung, Toshiba, Sony, LG, Panasonic, Pioneer, etc. will all manufactur a common gaming platform. More companies will create software, and everyone will profit.

 And then Nintendo no longer hascontrol of the hardware.

I.e (in the mainstream , in the current gen)

No motion control

No touch screens 

Nintendo needs no control over the hardware to release a controller and sensor bar. Sony, MS, Nikkio, Gameshark, EA, Activision, Wal-mart, Ford, Chevron, or anybody else that had the money to could release a motion controller and sensor bar for the PS3, 360, PS2, Xbox, Gamecube, PS1, or N64. All that really matters is if software devs would support it. In that case obviously nintendo would support it, and who sells the most software right now? Plus Nontendo would have been on the board that made the diccission on the consoles specs. So what would have stopped them from saying hey we got this motion sensor idea.

ms will leave then apple will enter

 It's NOT the only thing they do.  They still manufacture Hanafuda cards, as they have done since the company was founded.  It's just that the video game division has eclipsed the playing card division by a wide margin.

Exit: No comment.
Enter: Berkshire Hathaway - Post Buffet. On a serious note, since both the Playstation and the XBOX brands are just divisions of much larger conglomerates, its not impossible for them to spin off into their own compagnies which, in order to ensure a going concern (due to the possibility of loses), might be owned by a venture capitalist firm or another, non-sony or microsoft compagny. Not to be fanboyish, but Microsoft selling off the XBOX name and its fanbase to sillicone valley investors or a joint venture of large develloping firms would not be a bad idea. That way they would loose the stigma of being a MS product in the rest of the world. Why kill off perfectly good brand names if you can sell them to someone else for a large sum of money who might be able to do better with it?