Cheaper ,and worse .

It would be very unfortunate if that happened .

You are correct... but I guess that ties in with the hype as I had no clue and still I don't know what graphics processors gamecube and Xbox used.

However it was clear form day 1 day PS2 has an Emotion Engine...and that it will make games graphics look like Jar Jar from star wars.

In any case, don't get me wrong...its cool that Sony and Microsoft are bundling stuff together at a loss. I hope that doesn't change in the future and that we keep getting latest hardware in our consoles. Nintendo can come up with as many wii-mote waggling games they want...they will still come second fiddle in the eyes of developers until they start selling the latest hardware. The best developers make games to be the best they can be...not solely to make money.

I think all three companies are doing more or less what they need to do.

Nintendo has little choice. They simply cannot enter the horsepower race the other two are having. They are a modestly-sized company, not a huge corporate company. They could not afford the luxury of losing untold billions of dollars in order to gain a sizeable market share and be profitable perhaps three or four years down the line. They would have sunk faster than the albatross in ''Rime of the Ancient Mariner''...

Imagine how absurd it would have been if a small country like Monaco had entered the arms-race held between the US and the Soviet Union during the Cold War era. They would have never been able to keep up.

So Ninty resorted to a paradigm-shift. Instead of playing the same game as MS and Sony, they opted on exploring overlapping markets by focusing some on the hardcore audience and a whole lot more on the casual one, which I wouldn't dare say was non-existent, but at least it was much smaller than what it ios today. It paid off in a big way.

Maybe if Sega had taken a similar path they would still be creating new hardware. Damn, I loved my Dreamcast...

I agree with disolitude's sentiment that I would rather pay a little more to get the most powerful (but affordable) technology under the hood. But the point of the article is to point out that in view of Nintendo's huge success with much less costly technology, the other two might reconsider their strategies. They certainly do not feel they owe us any favors by constantly losing money to keep us customers satisfied.

A solution like releasing a state-of-the-art machine and a low-end, affordable product has worked for companies in other industries, such as car manufactures and computer manufacturers. But I don't think they would want to confuse consumers and cannibalize their own sales by taking such an approach.

My prediction? Perhaps we will see a slight turn of events, as Nintendo makes a bigger relative leap in hardware specs next generation, while remaining the most affordable machine, while the other two attempt to make their next machines a little more affordable. At least Blu Ray technology and HD media will be a lot more commonplace then, so that possibility may not be so far-fetched.

 The PS2 was not a really powerful system with expensive tech (just like all of the other systems I mentioned).  The PS2 retailed for what, $300?  The PS3 retailed for twice as much and is considered by Sony to be very powerful.  The main companies in the videogame console war (like Sony) didn't go super expensive/powerful until Sony tried it with PS3 (and MS to a lesser degree).

If the PS3 would have retailed for $300  (or even $350) and used common tech like the DVD (as Sony did with the common DVD with PS2); then, I would agree with you. 

I think it comes down to this...

You don't see Ferrari & Lamborghini changing their cars/business plan because VW sold more Beetles then the Murciélago and Enzo.

The Wii is in a completly different class, a different market. The Wii is cheap and its market is larger. I don't think it will effect Sony/Microsoft's strategy with their next console.

You act as if the Xenos is that much powerful than the RSX, when its barely any powerful in the first place.

I wonder, these are all interesting prospects, but what about inflation of the world economy? With prices of all things on the rise, by the time the next generation of gaming is underway, game companies might not have a choice but to keep prices above the $300-400 mark in order to maintain a profit period. With prices of fuel as they are just the cost of shipping units are going to be pricier than they were before.

The same $300 today might be the $150 ten years down the road. I wish this weren't the case but with the falling dollar as it is right now, we can only wait and see.

Couldn't have put it better myself, Rol

I think your right! I don't think we'll see another $600 console (PS3) for a while now! $250 FTW!!!

"You don't see Ferrari & Lamborghini changing their cars/business plan because VW sold more Beetles then the Murciélago and Enzo."

True.  But it would seem like the end of the world to them, if only expensive cars had been always sold, and now a company was selling cars, not just to the rich man, but to the people (Volkswagon =  The People's Car)

@RolStoppable

"If you want to use the car analogy, this means that Sony and MS, in order to sell a powerful system with many features similar to what the PS3 and 360 were when launched, will have to price their next systems in the $700-1000 range to run a profitable business model."

With technology prices coming down, Sony and MS could get away with the same initial prices as their current gen. launches were, that is $400-600.  Just that the technology jump would not be as noticable.  (Two PS3s wrapped up in HD tape.  HD being fancier than plain old HP tape)