Blu-Ray will do ok, but it won't be a patch on DVD. It will also be absolutely the last physical media made for the mass market. On those grounds I think console domination is more valuable, as they will be around for decades.

There is this strange assumption that technology exists in a void... No, the next generation will not be some sort of mythically calm "by-the-numbers" deal, because there will be new technology on the market by 2011 (estimated deadline for the start of the next generation). There will be new ideas for how to design a system. There's also new-found impetus to innovate in controls thanks to the Wii's impact, in fact; I fully expect we'll see the emergence of more "optional classic controller available" setups where the primary input means is not the usual gamepad we've seen since the NES era. If anything, the next generation should be even more hectic than this one.

Now you may be saying "no way, Sony/MS would never resort to doing what Nintendo did!", and you would be wrong. Because progress always goes in the direction that works, and Nintendo's direction is working. Only a great fool sees a more successful formula than their own, and then stubbornly insists on sticking to their current formula. And Sony and Microsoft are not fools.

@Sky

I really hope you are wrong as i personally hate the controls of the Wii so motion controls for every console would be horrible!

@Starcraft

Downloadable content is not going to be able to be mainstream for many many years and i don't think that it would catch on anyway as there are too many people that prefer to have a hard copy of their media (optical disk) so saying that Blu-ray will not have the success DVD has had is a bit short sighted!

Honestly I could care less for Sony's arrogance...I'm used to it since before PS2's launch.
I'll admit though...they do have a more favorable position with PS3 to take over market share because of Bluray but this also means that 360 will always have to work harder as a gaming machine to compete. This is why 360 will be the console choice this generation for me unless something changes drastically as I dont give a crap about bluray... I've never even bought DVD's...

Its not like Terminator 3 is a good movie now that its in higher definition.

Perhap.  BUt I think your being a tad optomistic.  The reign of DVD won't end for at least 4 years.  After that, both legal and illegal downloads will have advanced significantly.  The problem is now HD DVD is gone people think we have hit Blu-Ray's time, but it is nowhere NEAR mass market yet.

Unfortunately for your preferences, companies go where profits are to be made, not where the market's most frequent purchasers want things to go. Unfortunately for people who buy 20+ games per system they own, they are very much in the minority, and their impact on the market is considerably less than the droves of largely disinterested consumers who rarely get more than 3 games in the lifespan of their system. The next generation of systems aren't going to abandon the classic gamepad format entirely (as I said, they'll offer the gamepads as optional control devices), but the shift towards Wii-style controls is going to gradually phase the gamepad input device out. Just as with the joystick, they won't disappear entirely, but they're never going to regain the same dominance that they had in their prime.

@Starcraft

I also don't think that Blu-ray will have the mass market appeal that DVD had, the shift between VHS quality (and also convenience) and DVD quality was a profound shift in the market! I don't think that Blu-ray will have anything like that as the shift, albeit profound, is not enough for Mr average joe to warrent the expense!

Especially since DVD upscaling looks pretty good also and they are cheap without having to change your movie collection. I think it is more likely that DVD stays for a looong time yet and maybe digital downloads will take some market share, but i only expect that to be around 20% at most!

Well of course the PR will be overconfident, perhaps a bit snide. If the spokesman for your company starts crying and apologizing to people, it's going to make it look as if the company really is in trouble.

Sony wants to make it look like everything is fine (which by this point, I'd think it is) to give confidence to the consumers.

Frankly, Sony acted overconfident at the beginning of the generation because we spoiled them. Heck, the GBA couldn't even beat the PS2 in Japan! Japan is handheld heaven!

I dont think Sony released their console late .Its just that Microsoft rushed to the market to have at all costs a headstart .Sony and Nintendo launched their systems at the same time and they know way better than MS about hardware cycles .Taking its time to the market as assured Sony the reliability of their product and having included the BR in their machine and that will bring enourmous sales as the time goes by .

Software :The first year of the 360 was very bad with only GRAW ,Dead Rising ,Fight Night ROund 3 and Oblivion worth noticing .The thing is that as it was the only next gen machine around people kept comparing it with the PS2 and focusing on the good things (graphics ,online ) instead of its lackluster lineup .At the end of the first year it started to receive big games as Viva Piñata ,Gears of War ,Splinter Cell DA ,NBA 2K 07 ,Call of Duty 3 and by then the PS3 was released .The PS3 launched with a quite decent lineup .If we look at launch lineups from consoles back to the 16 bit era the PS3 one holds its own more than honorably .Games as NBA 2K ,Fight Night 3,Resistence ,Ridge Racer 7 ,Call of Duty 3 ,Marvel Ultimate Alliance ,Genji ,Madden 07 etc gave a good choice of good and great games .The japanese lineup was worse ,though ,and has been till now ,but that isnt a concrete problem of the PS3 its just that the japanese developer market has slowed a lot and few people are doing expensive HD projects so they sticked to the PS2 for the anime/gundam games.Looking at the 360 launch lineup ,Wii launch lineup ,PS2 launch lineup ,Cube launch lineup etc I dont think the PS3 was worse .But people wanted to compare it directly to the 360 cumulated lineup or against the Wii and 360 lineups combined "cause it costs as much as the two " and in those directed comparisions it sure looked worse .As the 2007 went by the PS3 had 2 bad moments in january-february and then in may early june with very few games coming and a software drought .After The Darkness and Ninja Gaiden Sigma appeared in end june things definitely picked up and from then on lots of games were released (GRAW2,Colin Mc Rae Dirt ,Sega Rally ,Warhawk ,Lair ,Heavenly Sword ,Stranglehold ,Folklore ,Eye of Judgement ,Assasins Creed ,Call of Duty 4 ,Unreal 3 ,Uncharted ,Ratchet and Clank ,Madden 08 ,NHL 08 ,NBA Live 08 ,NBA 2K 08 ,Fifa 08 ,PES 2008 ,NFS Pro Street ,TImeshift ,Medal of Honor Airborne ,The Orange Box ,Skate ,Rock Band ,Guitar Hero III.. )until the end of the game .I think that the first year lineup is the best one I have seen with some 30 games above 8 and another 20 decent games and not counting the Store with its fair share . The start of 2008 has been quite good with games as Burnout Paradise ,Devil May Cry 4 ,Army of Two ,Turok ,MLBA The Show 2008 ,Lost Planet ,Everybodys Golf  and in Japan Yakuza 3 ,Disgaea 3 and soon Valkyrie of the Battlefield .Games as Condemned 2 ,Gran Turismo 5 Prologue ,the cited Valkyrie of the Battlefield or the port of Eternal Sonata are about to launch and that will be filling the last holes in the lineup as genres is concerned ...and GTAIV ,Wipeout HD and others are really close too.

Hardware :Launching at 600 has really posed a problem to Sony and continues to do so even after the price drops .I think if they really  got too arrogant and thought they would sell no matter the price they have learnt by now  thats not the case .I think this lesson has been learnt .And I dont think they will make the same mistake twice .They now have developed the main tools they will need for their next console .They have developed the Cell arquitechture ,they have developed the BR that its turning slowly into mainstream technology and they have partnered for the long time with Nvidia for the graphics chips .They could release a PS4 with a Cell based motherboard multicore (say a motherboard with 5-6 Cell or Cell+ for a total of 5-6 Cores and 35-42 SPUS) as CPU ,the best GPU Nvidia can offer at the time and a BR reader of multiple speed and able to read 200Gb discs without having to invest too much in research and having the components down in price already .Their Cell+BR bet wasnt only for the PS3 .

PR things .Well there were some arrogant phrases at the time for sure .Lately that has changed a lot .In any case   I dont think they were more arrogant that others .We have heard Nintendo saying XBLive is full of shit and Microsoft saying the Wii is "a cheap toy without HD graphics " for example .Its just that Sony being the leader was heard with a lot of criticism and a legion of hateboys were desiring and hoping a Sony rep said something vaguely arrogant to use it as Gif and remind everybody that "Sony is evil and arrogant they must fail " .I dont have heard anybody critizing Iwata for saying "consumers dont want more graphics " for example ,if it was Sony who said that all the hateboys in the universe would have made that and a photo of Kutaragui or Phil Harrison their GIF for the years to come .


All in all I would say Sony is right now in the right direction again .They know they need a lot of content ,the know they need more exclusives aside the first party ones and are working toward it ,they know the online must offer something distinctive and are going to deliver it with Home ,they know the price must come down the faster possible ,they have changed the publicity guys that made the This is Living fiasco ...they are on the right track again .

@Diomedes

Nice post, well thought out and presented :D

I agree that Sony is back on the right track, i just hope that it stays that way (then again i don't see any reason why it wouldn't)