http://www.next-gen.biz/index.php?option=com_content&task=view&id=9706&Itemid=59

By Kris Graft

 Analyst Billy Pidgeon with IDC tells Next-Gen that in the wake of the Wii's success and the explosion of casual, community gaming, the PlayStation 3 could be the last of the state-of-the-art consoles. At launch, researchers estimated that Sony lost around $240 per 60GB PS3 sold. A pricey Blu-ray drive, state-of-the-art GPU and multicore Cell processor drove costs to new heights. Xbox 360's per-unit loss wasn't much better at launch at around $125 per console, according to estimates.

And then the Wii, with its cheap "GameCube 1.5" technology came along, albeit with motion sensing, showing that Nintendo could sell a console at no loss, attract a massive following and be profitable from the start.

"I think the results of this cycle will have a strong influence on the next cycle, in that cheaper consoles will be expected," Pidgeon says, alluding to the success of the $250 Wii. "Microsoft and Sony will attain successful business on this generation, but catering to the early adopter hardcore gamers with a technology leader strategy will be difficult in 2011.

"...Third party publishers are already looking for ubiquitous platforms to reach the market increase achieved by Nintendo and Guitar Hero," Pidgeon says. "The platforms of the next cycle may not be a console at all, but software distributed by network to convergent devices like PCs, set top boxes and smart phones."

He adds, "I would have dismissed this idea as unachievable last cycle when only Xbox could provide a promising connected console experience, but it is entirely possible that the PS3 is the last bleeding edge console hardware we will see."

Further analysis of the Wii's effect on the next console cycle can be found in the Next-Gen feature, "Wii the Death Knell of the Bleeding Edge Console?"

Cheaper is better, frankly I think prices of all the consoles and games today are extortionate.

they are getting out of control

i mean at teh current rate its going to become cheaper to buy a mega gaming pc rather then the next xbox or ps4

it will, but they will probably not go as far as the wii has. They can attract hardcore and casual gamers by making a cheap but still powerful console, loss leading is still possible even at lower prices.

Next gen there will be smaller differences in graphics than before, and it will get even harder to distinguish between the next gen and this gen. I don't see a system costing more than $300 at launch. Maybe it could be possible if they launch a year before the other consoles, but I still don't think so.

It's amazing that people still don't realize that the goal is not to sell the console. Console is just the way to sell games, which is the goal. And to sell games, they need to be fun to as many people as possible, or no one will want them.

Perhaps when people will realize that despite XB360 being cheaper than the Wii, it won't sell better than the Wii, maybe then they'll understand that price is a small part of Wii's success. Then again, some won't understand until this generation is finished.

PS3 GPU isn't state of the art. The Xenos is as far as consoles go. And I agree with everyone else

I'm not sure I agree with this line: "The platforms of the next cycle may not be a console at all, but software distributed by network to convergent devices like PCs, set top boxes and smart phones." Even if the software is all digitally delivered, I'm not sure consoles themselves will be completely gone. But that's just my thinking.

I do agree that consoles next generation won't push as hard on the hardware front, and instead aim for more fun ways of playing (be it motion controls or something completely different).

NintendoMan said: Cheaper is better, frankly I think prices of all the consoles and games today are extortionate.

I agree with you there.... especially with the price of new games @ $60 and $70+ for "Limited Editions" for most 360/PS3 games.  That's just ridiculous.... i haven't payed $60 or more for a game since the launch of the N64 and that was because of its cartridge based medium.  Once disc based systems became the norm we got cheaper games as a result... most new games were $39-$49 throughout the PS1 and PS2 eras.  Now we're back up to cartridge prices again.  ARRRGGHHHHH!!!

As for the consoles themselves, i think based on what we've seen with the 360 and PS3 so far the mass-market consumers arent willing to go above $399 threshold for a console, as evidence by the PS3's recent surge with the new 40GB model and the fact that the 360 debuted at that price and is now cheaper, with only the premium elite model costing above $400.  I think that the "next generation" of consoles will take the same approach as Nintendo, basically just "upgrading" their current hardware and only making them marginally more powerful in order to keep costs down, because let's be realistic... who's gonna want to shell out another $4-$500 in another 3-4 years for a system that is only marginally more advanced then what the 360 and PS3 currently offer?  I sure as hell won't thats for sure, and i can guarantee you the vast majority of consumers will feel the same way.

Honetly I am totally angry at Nintendo for doing this. Going cheap is cool but if you are doing it at the cost of features and performance its not worth it. And Wii has done this... Wii could be amazing if it was up to spec with the other 2 consoles but technically it is still last gen when it comes to visuals.

Perfect example...Sega superstar Tennis...The wii game plays the best because of the motion controlls but looks and sounds like ASS!

So I can't stand playing it knowing it is better on another console hence why I got the 360 version.
In the future, I could do without the Bluray drive/multimedia stuff however. I just want to play games.

So he is saying next generation may be like the PS2/DC/Xbox/GC generation or the SS/PS/N64 generation or the SNES/SG generation or the NES generation where companies didn't lose $200 on consoles and the vast majority of consoles started with the same price PS3 may get down to next year. That makes sense as it is consider the norm. Sony tried something very different this generation and it has hurt their bottom line.