Microsoft may get out of the business if they are doing poorly, but they really aren't right now. I mean, yes, Sony has a small competitive advantage and MS will probably have to drop prices before christmas to keep the sales matching, but the fact that they've gone from a complete outsider to competing with the big boys in two generations I think gives MS execs hope.

The 360 is already starting to turn a profit (I think, and I know it'll take forever to get over the sunk costs of the XBOX and development of the 360 and RROD money), and they're not going to leave the field just because they lost a lot of money in the past. Plus, MS isn't going to abandon all their 1st party IPs they spent millions developing (GoW, Halo, ect.)
By the time 2011 rolls around, the technology that makes the PS3 unique and powerful is going to be significantly cheaper and more commonplace, and microsoft could easily cobble together a powerful successor to the 360 using Blu-Ray, next-gen graphics cards, and terabyte harddrives for less than the PS3 costs right now.

As for ninty and sony, I think you're entirely right. Sony is still the best console on the field in tech specs, and so they want to stay with their console as long as they can.

If MS comes out with a Nextbox in the next, say, 5 years, they're gonna get the jump on Sony. Undoubtably Sony has learned from their mistake and probably has a PS4 already in development, so they won't get caught off guard completely, but it's still going to be a killer blow to Sony.

If MS and Sony start the next gen in the next 5 or so years, I have no idea what Nintendo is going to do. I could see them just announcing Wiis for, say, 150$ in Red, Black, Silver, and White, and beating the NextBox and the PS4 into the ground. If they can't stand up against the next gen, THEN they'll release a WiiToo (most probably not branded using the wii name), which is basically a Wii with improved Motion-Plus level motion controls, HD graphics, and even smaller than the wii.

I write too much : (

Hey, welcome to the site, astrosmash. Nice read! Very unbiased.

Why would Microsoft abandon their console after they have started to make a profit? They are doing amazingly well for being in their second generation and competing against two juggernauts of gaming.
Do you realize how much money there is in the gaming industry? It's one of the most rapidly expanding markets in the world with billions upon billions of dollars in revenue.
If you think Microsoft is going to give up on such a wealthy market after already having made advances in the industry far beyond what anyone expected then your not very familiar with the history of Microsoft.

edit: although i do agree with your analysis of Nintendo and more or less on your views for Sony. However I disagree with your reason for Microsoft entering the market. Looking at past statements from Microsoft its obvious that they were trying to find a way into peoples living rooms and a console is an obvious extension of such an idea.

May last seven years, but as Sony has stated they may never make what they have sunk into back, which puts them in a poor, poor position for the PS4. Nintendo they can pretty much do what they want. As for MS, yea they will be in it with the 360 until at least 2012 with legs beyond that even. They just had their first full year of profit andi t's nothing but up from here for them as they have the serious costs behind them now and the SW money is only going to continue to poor in. Price drops will be key and MS can afford nice price drops for the years to come. They will most likely introduce their new console at the end of 2012 taking into account everything Shane Kim has said to date.

@astrosmash

Why would MS abandon a revenue stream when they have already invested so much into the sink cost. abandoning a market or forcing a switch too soon is bad business remember i called it 2012 earliest 2014 most likely 2016 latest

While I disagree with your premise, I applaud this post. It was clearly thought out and unbiased.

is it possible to rate this thread? YES 20\10

ot: for sony and nintindo u r 100% right
but for MS mmmm i really don't know ,, the gaming industry is tempting, profits never stop ,,
anyway if they release 720 i expect SONY TO SKIP THE NEXT GENERATION

:) nice read and welcome

I really thing Sony Can skip a gen, what improvements can be made?

Fast Multicore Processors: Check

Physical Memory: Needs improvement

Disc space: Blu-Ray and Upgradable HDD so Check

Graphics Card: Since it handles 720p great i say check cuz i don't thing people will trade up just to get a console that plays 1080p for all the games.

I think at current we are getting to a point of diminishing returns, lets say in the past doubling processor speeds made graphics 2x as good, but now with systems already in the HD realm i don't see how creating a 16 core processor with 8 gigs of RAM is going to help to improve graphics dramatically.

I mean think about it, how much more detail will be apparent to the human eye. Lots of people have trouble determining 30FPS to 60FPS. And a good deal of the population doesn't have eyesight good enough to tell the difference between 720p and 1080p.

Plus you can only have as much graphic detail as the programmers put into a game. And Devs are already moaning about how much they have to put in. Plus who wants sequels to release 10 years after the original?

I agree with the OP on many points. Very good Thread. But another gen will come, that's pretty much garanteed...

Exactly my thoughts.
I think MS will still be the first ones to launch a new console, but the 360 won't be immediately shut down like it happened with the original Xbox.