I do not believe Microsoft will go down the path of Blu-ray they would have to pay too much  royalties to Sony to have Blu-ray. Downloadable media is definitely a step in the right direction.

I'm talking about the next Xbox, not a revised 360. MS wants their boxes to be integrated multimedia hubs... It's pretty much a given that the replacement for the 360 will include a Blu-ray drive. Proprietary formats defeat the purpose of a home theatre hub and DVD won't cut it on a 4 or 8 core machine with 1+GB of RAM and a 512+ video card.

Yeah, and Nintendo will launch 4 gamecubes taped together with a funny gadget that will have all the grannies going punk and name it something everybody will hate at the beggining.

Seriously, NO ONE  knows what will happen 3-4 years from now, if 3 years ago, when the gamecube was pityfully  agonizing someone told us that Nintendo would do a come back with the cheapest non-hd console, we would all have laughed at their faces

And citing moore's  law seems a little ill placed, as it disagrees with the prices and positions of the current generation

Moore's Law applies to standardized costs, which is what I'm talking about. MS will be able to release a $300 machine with superior specs in 2010 and take little or no loss on hardware. Whether they do so or not remains to be seen but given Microsoft's apparent console strategy, we can expect to see a new Xbox in 2010 or 2011.

And at that point, Sony needs to make sure the PS3 is well under the price of the new machine. 

by common logic $199 is way to high. Since by the end of this year the PS3 will at least be $299 making it so that by 2011 the PS3 will have to be around $99.

I agree on moore's law on standarized costs (at least for another 12-15 years) my point is, standarized costs mean nothing, specially when some companies sell to a profit and become market leaders and other sells to huge losses just to trail behind in sells.

I believe  this generation will probably change a bit how machines are designed (DS vs PSP, Wii vs PS360) bigger and more expensive does not necessarily mean better (for the hardware company at least, that is)

Also, the wii will probably have a lower life expectancy than the other 2, as it will look outdated much much faster, the truth is that it is really hard to look at the past or any kind of law to predict the future/outcome of the current generation.

I don't know if Sony will abide by their prediction to keep the ps3 for 8 years, it seems odd, as it will have to compete with the next Xbox and the next nintendo, and it will have to do it with lower specs, and probably not as market leader...

 99 is too low, the ps2 launched 8 years ago, at 300$ it still sells (and quite well too) for 130$ That is a 60% price drop

The  ps3 launched 1 year ago for 600$... although if they really want to keep in the fight, they will have to fight a lot... so who knows, 99$ still seems a bit excesive though

In Europe the PS3 is currently outselling the Xbox 360 despite the fact one costs £299 and the other starts at £159. 

 Even without a price cut this year I imagine it will continue to do this. Looking at the way Sony dropped the price of the PS2, I predict in Europe at least they'll drop the price to £249 in the run up to Christmas and drop the price again to £199 in late 2009/early 2010.

 Also the PS3 is still one of the cheaper Blu-Ray players at the moment, in fact looking at the cost and features compared to other Blu-ray players (it plays GTA4!) its the only one worth considering at the moment.

 If the price of Blu-ray players drops significantly though, this could cause a premature fall in price of the PS3.

I pretty much agree with that. The real wildcard in the upcoming years will be Nintendo. It will be interesting to see if they cut the Wii short in favor of putting out a new 720p machine for $250. I think the Xbox will be first in line for generation eight but there's a small chance Nintendo could surprise us all and pull a Sony with two consoles selling at the same time.

One thing I think we know for sure is that no company will be taking a significant loss on hardware next generation and no console will break $400 at launch, with Sony and MS likely targeting a $300 price point. Let's hope they get this stupid "multiple SKUs" thing out of their system this generation, too.

I tend to agree, but I believe there will be a small price cut in early 09 during the GT 5 Intermediate launch, then another in summer 09 during GT 5 Later Edition launch, then a big cut at the end of 09 during the GT 5-Almost-Final launch. 

Sorry, I just can't resist poking fun at the fact that Sony can't seem to get the GT 5 game finished.  But I do agree with your timeline for price cuts, in general.