I think it all depends on how things go with the reliability issues. First they need to prove that the RROD problem is behind them with the new hardware revs.

This may still not be enough though if the reputation of an unreliable console still follows the 360. If they fall behind Sony far enough and they think it is because of reliability concerns, I can see them releasing the new xbox in 2010-11 timeframe.

@Mifely: So, what's stopping M$ to go to architechture that works like the Cell?
The genious of the Cell is, that every SPE works from its own cache, while PPE can work as a controller for all the SPE:s. The problem in the other hand is, that one SPE can't do much per cycle.
Sure, it's scalable architecture, but then again, adding the number of SPE:s requires more space or a size shrink (and shrinking the PPE leads us back where we started).
PPE is the "weak spot" in Cell developement, since shrinking it causes loss in number of SPE:s and if you don't shrink it, it causes loss in performance. So you aim for the smaller scale manufacturing tech, shrink SPE:s and add transistors for the PPE in order to use the space, when the biggest improvement was the huge cache Cell has. What happens, is that you have the same issues that you have with other processors too. Basically Cell developement goes forward to keep up the pace with competion, not that it would be some sort of miraclous supercomputer. The biggest advantage Cell has over the multicore (CISC) processors, is its price, not performance. And yes, Cell type of solutions may very well come more common in RISC processors, before the quantum processors hit the market.

Main reason for multiple processors is, that the "arms race" runs faster than the tech. Performance has to double faster than every 18 months. And this is just caused by HW manufacturers trying to show who's got the best performance. A little similar thing as during the cold war between USA and Soviet Union. Both had enough nukes to destroy all (not counting in bacteria) life on earth multiple times, but still had to race who could do it more often. So it's not the markets demands, it's the competitions demands.

The reason for jumping into next gen isn't the technical requirements, or the markets demand, but a financial decision of the manufacturers. You can't sell the same stuff for the same customers too many times and in order to raise the sales, when market starts to saturate, you need to give something new for the market. I believe that Sony and M$ are going to profit from hardware in the next gen, which means that early console release serves them both, in terms of getting a foothold from the market and still making profit, so the 2011 for 720 sounds very logical.

@Squiliam: X86 processors for the consoles doesn't sound propable, since the CISC processors tend to be more expensive than RISC.

And the Xbox was killed because M$ couldn't afford to make heavy losses with two consoles simultanously. The bad NVidia deal sure contributed a lot, but the decision was purely financial. They could have made a new deal, but supporting Xbox didn't make financial sense.

@BDBDBDBDBDBDBDBDDB

The reason why I considered it a possibility is because Intel has something to prove with their larrabee many core in order x86 GPU. If they get it into a console it will become imediately successful so long as it performs adequately. Just as the Cell wouldn't have been much without the PS3 to inspire development on that platform. It would save Intel just as much on development to either take a hit on the chips or sell them at cost to Microsoft for the Nextbox.

@ Mifely,

you're well read and your arguments sound cool and everything, but I think you simply draw the wrong conclusions when it comes to CPU vs GPU. In the PC-world it's nearly always the GPU that is the bottle-neck in gaming (since people buy a comparatively strong CPU from Intel) like for example Core 2 Duo E8400 together with a GeForce 8800GT.

Same phenomenon with consoles. All the 3 cores in the X360 aren't even used (because it's tricky to code multi-threads), same with PS3, and still they have no trouble feeding their respective GPUs. And the reason why all games are nearly identical today on the X360 and PS3 is because the GPUs are nearly identical in performance. The ATI GPU in the X360 has nearly identical performance to a Radeon X1900XT* and in the PS3 it's a version of GeForce 7800GTX - thus it's the GPU that is the bottleneck, not the CPU. (X1900XT=7800GTX)

* Note: I know that the X360 GPU has architectural simiralities to ATI R600, why the shader power is comparatively a bit stronger than in X1900XT and 7800GTX, but it's no big deal).

And yeah, Moores law isn't dead, at least not with GPUs. The 8800GTX nearly doubled the performance of 7800GTX already. And just read the benchmarks for GeForce 280GTX and Radeon 4870 in a couple of weeks and you'll see it's actually faster than "double every 18 months" in the long run.

@(assorted) You all have very good points regarding the Cell.  I'm not certain I agree 100% with all of them, but most of them are valid nonetheless.

One poster pointed out that the issue of console generations really boils down to money, and the consumer willingness to upgrade, which is essentially what I was trying to get at.  Using a comparison of the Cell's upgradability vs the 360's upgradability was an error -- this isn't really the critical issue, although I personally believe that it plays a reasonably important role, with regards to money.  I believe that MS will be forced into losing BC, because they cannot actually upgrade the 360 architecture to be BC affordably.  BC would be more important in the short-term, I believe -- mostly because, unlike the PS2, I don't believe the 360 will remain in production past the introduction of a NextBox (I could be totally wrong here though).  I don't believe Sony will necessarily have to lose BC with its next console, since the architecture may be very similar.

I don't think the next gen of consoles will be as great a leap forward, in regards to raw computing power, as tis gen was over the last, or every generation has been over its predecessor, to this point.  Although the PS2 and PS3 have supported BC through hardware, I believe a software solution may be necessary for the next gen of the 360, and if the architecture is even more radically changed that the 360s was over the XBox, BC will become nigh impossible.

Without BC, MS would upset not only consumers, but also developers who spend 10s of millions on engine development over a consoles lifetime.  That's also going to cost dev time, and quality for new titles, in the short-term (as it did for both the 360 and the PS3... especially the PS3, since the change was more radical, IMO).

It would be a serious financial error, IMO, to release a high-end console by 2011, that (I hate bullet points, since they seem to aggravate readers, but I want people to be able to read through the post quickly if they want):

(a) costs a ton to develop, because its a completely new architecture, and...

(b) loses BC, and thus upsets users who purchased a 360 not very many years ago, and...

 loses developers, temporarily, who need to throw away their software architectures and start anew, and...

(d) loses developers, permanently, who already have a working PS3 software architecture that may be upgradable to the PS4, and...

(e) (this is probably the most important point) focuses on the smaller market share (the high-end), when the current base 360 architecture is perfectly capable of becoming the next Wii by 2011, with some simple additions, like a BD drive (this would one-up the Wii, and should be cheap by then), a built-in HDD, a smaller case, lower power consumption, and a pointing device (the number of RTS games coming to the 360 practically beg for such a thing).

I think the next console generation from MS will be another 360, given these points.  I guess you could say both that the "next gen" could arrive by 2010/2011 and that it doesn't, in that way.  Shane Kim's point about the 360 lasting 7 years may very well mean exactly this -- the 360 can continue to compete for 7 years, and there just won't be a need for MS to tackle the challenges of a new architecture until much later.

@Squiliam: I didn't mean it would be impossible, just provided the reason why we propably won't see one. Of course, it's only a question about can Intel provide a processor that has "enough" performance with "cheap" price. Maybe they could, but then again, it's not their businessmodel. And the deal with M$ about Xbox:s CPU was really bad for Intel.

@Mifely: 360 propably will stay in production after its successor is released, for the same reason why Xbox was killed immediatly; money. 360 hardware will make profit in 2011, which will financially help M$ in the transition to next gen, since a number of late adopters will get 360 after next gen is out. Although, it's also possible that M$ will kill 360 fast, if it's seen as a decision that pushes 720 sales.

I agree on that the leap in power won't be so big as it was from last generation to this (not counting Wii), but more like GC to Wii leap (not counting Nintendos next console), so there's no need to push the hardware specs as PS360 did. So we propably won't see "high-end" consoles, we propably see similar cost efficient systems as Megadrive and SNES were.
BTW, one interesting thing to notice, is that aside from Atari 5200->7800 and Gamecube->Wii, no console have so far used the same chipset as its predecessor (not sure about Ataris, but that's how i recall). And using the same methods as Sony, i don't think BC will be a problem. Sure the chips are currently big and somewhat expensive, but after few years, situation is completely different.

Late 2011 seems propable to release successor for 360, it's 6 years old by then and the launch games for it needs to be started this or the next year. And M$ definately wants to fight for its market share, maybe not by "ignoring losses", but at least i believe they want to be the first one out to gain foothold before competition comes out. 360 would be doing really bad without its headstart. Besides, "7 years" would mean only one year overlap between 360 and 720. Nintendo has hinted for 2012, and i doubt Sony will wait too long after M$ makes its move.

I think that ATm they're satisfied with what they are making. They are keeping similar sales with PS3, and if they keep that up they'll make profit. Most important thing is that they keep lifetime sales above PS3 as long as they can. They have accepted that they lost the 1st place, but second place seems good this gen.

I can see the 360 lasting 6-7 years. It won't be nearly as successful when the PS2 was at that 7-year point, but it will still make money, I think.......