There won't be a console "upgrade" for a looong while, from a purely technical standpoint, even.

There are some mighty steps on the way to building chips with smaller than a 32nm process. 22nm maybe for expensive electronics, but at 16 and 11nm, the gate size is so small as to make quantum tunnelling (electron loss) a "pretty dang hard" issue (major understatement). That may extend to being financially impossible, at the commercial level, due to that darn physics thing. Even the 32nm and 22nm chips may not be affordable (by the avg console consumer) any time before ~2016 (if that), due to cooling issues and new material costs to manufacture those chips out of not-silicon. Because it can be made doesn't mean its affordable enough to go into a consumer device... not even close.

Even 32nm chips will bleed heat so badly as to force chip manufacturers to go massively parallel to gain any real speedups, while lowering their core frequencies, to reduce heat. (much like modern PC quad cores do already)

You can bet that there won't be a future CPU capable of running a single core at 3.2 GHz in the near future, if it has enough cores to be "faster" than the current gen as well (at least significantly faster -- i.e. worthy of a console upgrade. 6 3.2 GHz CPUs maybe... 16? not even remotely soon). That means all BC for this gen of consoles is... poof. gone, because making BC for an app which requires a single thread to run at 3.2 GHz run in parallel -- requires re-writing the app. It can't be done with an emulator, of any sort. (note that the PS3 actually has 2 PPU threads at 1.6 GHz, and the SPUs, since they sort-of enforce a parallel software architecture, maybe very well upscale at a lower clock... its *possible* that the PS4 could play PS3 games... but not the "XBox 720")

You might see parallel GPUs which outperform the current GPUs by a large enough margin to be considered an upgrade, but... I would say the leap from last gen to this gen wasn't even close to what previous jumps were, and the GPUs got a LOT faster. User experience == not much better, especially if they don't own a 1080p HDTV, and HDTV adoption seems unlikely to be there by 2012, at the current rates. Even if everyone could afford a HDTV, the diff between 720p and 1080p is hardly worth a console upgrade for most consumers (e.g. Wii.. perfectly fine for most gamers, apparently).

Development costs are skyrocketing for console development -- imagine the costs if every console suddenly became a super PS3, and required massively parallel programming to make a game cooler than the "last gen". If you think publishers want a new gen of consoles by 2012, you are waaay off base. They can't afford it. Publishers can hardly afford to fund AAA titles as-is -- the software libraries of the 360 and PS3 are only as large as they are *because* the two consoles are similar (in performance)... and I wouldn't call their libraries "large" by any stretch, compared to previous generations. Places like GameStop make the majority of their income from used game sales these days... from my standpoint, its not hard to guess why, or why the PS2 still sells.

The PS3 and 360 will shrink, come down in price, lower their power profile (more important in the coming years, of fossil fuel deprevation, than you may think), etc. But there won't be a PS4 or XBox "720" for a long while.

Nintendo is the only company with room to grow. MS will see that, and go there (cheap, simple, casual), if they are into making money -- I think they are. Sony... who knows, but I don't think they will make a PS4 anytime soon. 10 years... yeah maybe. 2016 end-of-life for PS3 maybe be an underestimate, IMO. 2014 is certainly the minimum for an affordable, faster console, and it has a mountain of obstacles to overcome at that.

If MS and Sony continue to make the 360 and PS3, the first to release a radical new design (i.e. non-BC machine that requires billions to develop and millions more, per developer, for publishers to radically revamp their game engines and "how to" ideas) will fail. The one who sticks with the current gen a tad longer, will get the love of all the publishers who watch the new console fail, and are glad they aren't throwing their money away on it.

Moore's Law is dead.  Get over it, and give your PS360 a hug, because its your gaming buddy for a long long time.

I should add that Nintendo could upgrade pretty quickly, if they wanted... but does that qualify as "next gen", since the console could really only be slightly better than the PS360, and still be affordable for the casual consumer?

The next generation only starts when Sony says it starts and launch a new PS console.
MS has been making computer games for Windows since the early 1980's. Entering the console business is just an extension of their gaming market. Gaming on PC's have existed long before the first Nintendo,Sega or Sony consoles arrived.

Interesting pionts.

Welcome to VG, and a nicely put together first post.

I generally agree. 2009 is just around the corner, and if anything it feels like this generation has "just started".

If there is any new hardware, it will definitely be sold in conjunction with the old ones. The companies will only release new hardware to give them a competitive advantage - and its more likely to be upgraded versions of the current machines (they are easily spec'd high enough for now).

The only company to potentially release new hardware would be MS, but I'll be surprised if this happens in 2010. Possibly 2011, and more likely 2012.

...

On the other hand, there will be PLENTY of new hardware in the coming years - either from Apple, handhelds, or even other companies. Its just that the current consoles have no reason to stop selling anytime soon - they are all moving into profitable "brackets" on a upwards trend.

That was a great read. Welcome to the site, man.

Your points are very sensible, and I can't do much else than agree. This generation will probably last longer than the previous ones... Unless, as you pointed out, someone else wants to join for a piece of console pie.

I think that this all sounds pretty accurate. Excellent post. Oh, and I love Astrosmash.

You all believe MS will bring out the the first next generation console. I put my money on Nintendo bringing out the first next generation console the Wii graphics will look very outdated in two to three years times. Nintendo historically brings out a new system every 5 years. Sony and MS could launch new consoles in the same year a year after the new Nintendo console.

I agree with the OP's points that all 3 have valid reasons why they should extend the current cycle (or more accurately, delay the next one.)

Sony and MS are at best just crawling out of the holes they dug for themselves, and need to build up enough $ to support their next box. Could they afford to build a next box even if their current gen turns out to not be profitable over its lifetime? Of course they could. And like Sony is doing, if the last gen (PS2) box is still selling, that can help cover the losses of the next box. But is it good business practice to do that? No way.

I don't see MS getting out of the business. And the desire to spread to the living room themselves was as strong of a motivator as to keep Sony from claiming it and moving into the PC software area.

Finally, as somewhat touched on, but not fully examined, I think it is Nintendo that has the most to GAIN by releasing first with a new box.

Reasons for Nintendo to release a new box first:
1. Has the 'room' to grow. It can go to HD, get better graphics, better controls cheaper than the competition. All it had to do is go slightly better than the then costing $200-250 X360 and PS3. For MS or Sony to do the equivalent improvement over their current machines would put them back into the $500+ sales range again.

2. It's better to be the one to undercut your own sales rather than let some one else do it. Keep the Wii selling like the PS2 is doing now (and the various GameBoys did while the DS was starting to sell), but be the first with the newer version of the 'Wii'.

3. Move its market upscale and re-claim some of the hardcore lost. As more of the population goes to HD, N. will need a box that accomodates that. By getting one that is better than the current gens but still inexpensive, it forces the others to either rush their new box to market (as MS did to Sony this gen), or makes their current boxes look a bit tired (as in Wii vs the PS2).

Astrosmash, you can't lurk in the background while the rest of us read fanboy hissy fits all day! That's the best OP I've read in weeks! Well done, man!!

By the way, Groucho, I tend to agree with you, which is why I was willing to slap down A$1,000 for my BC PS3 last year. And I hug it regularly :)