How is a Sony/Microsoft merge be more likely at all? It's just as unlikely as MS/Nintendo if you ask me.

My answer doesn't change too much though. I'm just going to replace the word "Nintendo" with the word "Sony":

Microsoft would ruin Sony.

Well thanks! 

I'd just like to elaborate:  I'm a big fan of video game history, and I know that this generation has offset things a bit and history alone must be taken with a grain of salt in making future predictions.  In many cases, history no longer gives us a stable image of the future of gaming.

Sony has used a different format for all four of it's machines:  CD, DVD, UMD, Blu-Ray.  They're a huge electronics and tech corporation and you can bet that they've already got Blu-Ray's replacement cooking somewhere.  Especially since I don't believe Blu-Ray will actually detrone DVD like the most ardent Sony fanboys believe.  DVD is too well ingrained in society.  It's used everywhere, it's the perfect new replacement for both CD's and VHS in most cases.  Blu-Ray is still the new laserdisc and will be relegated to video games and some movie sales--though it will fare overall better than the Laserdisc medium, it won't displace DVD's as a standard format.  When it comes to computer software, movies and the like, regular DVD's will maintain control. 

The recent reports that Nintendo is working with InPhase on a purpoted HVD (Holographic Versatile Disk) reader show interesting new ambitions on Nintendo's part.  I think it's obvious that the main reason Nintendo is working with this technology is to implement it in future video games.  By the time Nintendo and InPhase are ready for the next generation, this technology is actually likely to be consumer-affordable.  If not, I'm not sure what Nintendo would do since they aren't using a standard technolgy as is.  Their optical disks are developed by Matsushita, and are similar but not the same as DVD's--in fact, they aren't actual DVD's because Nintendo didn't want to pay royalties to use that medium.

I only half-heartedly theorize that MS will use HD-DVD next time simply because they're familiar with it now, and just because a medium isn't popular doesn't mean there isn't a use for it.  Beta videos are often still used in various aspects of televised production.  Sega used a format called GD-ROMs for the Dreamcast (with equivalent storage to the tiny GameCube optical disks).  Really, if MS uses something like HD-DVD, it'll be an advanced follow-up to the format because I don't believe they're fans of Blu-Ray, and don't think they'll become fans of Blu-Ray any time too soon. 

But again, the Wii and DS threw some big-ass wrenches into the gears of gaming and no doubt sent everybody else back to the drawing board.  This makes it next to impossible to actually predict where things may be headed with the next generation and all but ensures that it probably won't come as soon as we might fear.  If anything, I see MS as the only console maker next time to stick to the classic scheme of things (dual analog and the like).  Sure, there is a motion-sensing controller in development for the X360, but it's not being made by MS.  Someone else is tinkering with that.  And what that means is that MS probably won't do much of anything--if anything at all--with it.  About the only solid predictions I can make are that all next-gen (8th Generation) consoles will be Wi-Fi and will come with large built-in harddrives, and that none of them will be weaker than the Xbox360--Nintendo included.  They will also all be HD.

The final point I want to make is that Hideo Kojima himself essentially claimed to have already maxed the Blu-Ray medium with MGS4--even alluding to the fact that there are parts of the game of somewhat lower quality (be they audio or visual, I don't know) due to having to use compression to get them all to fit on the disk.  It took a long time and an uphill battle for DVD to finally usurp VHS from the market.  The average consumer is the reason for this.  And the average consumer is not going to abandon a format they took years warming up to just because Sony is offering something slightly better--in many cases, Joe Sixpack consumer can't see any real difference from DVD to Blu-Ray anyway.

I think if this generation had played out similar to some other generations then new mediums might have been introduced in the next, however, Microsoft and Sony both got a lesson from Nintendo in pricing.  So, I don't think they will do anything extravegant with mediums this time.  Although Sony has changed mediums with each console, you can only really consider the PS1 and PS2 since the UMD was developed for size constraints that home consoles don't have.  When the PS1 came out in 1994 (Japan), the DVD format wasn't even brand new, it was still being finalized as a format.  Also, the necessity for that size of a game wasn't there in consoles yet.  When the PS2 came out, DVD was a mature format and it was a no brainer to use it.  The PS3, on the other hand, does not line up with the PS1 and PS2 in that it was used to launch a format.  While Blu-Ray will not wipe DVD off the map like DVD did to VHS, the Blu-Ray players can still play DVDs.  Regardless of the speed of adoption, Blu-Ray is now the default standard for disk based HD video.  Since the PS4 will likely come out roughly 6 years into Blu-Ray's life, it is unlikely that Sony will use anything else but Blu-Ray.  The disk has the capacity they need and the drives will be faster and cheaper to produce.

Kojima spouted alot of marketing with MGS4, but it also used alot of uncompressed audio.  That fills up a large amount of space.  I don't think that uncompressed audio will be the reason that people push into other formats though.

With 3 major players in the industry now, I think that Microsoft and Sony will move a little closer to Nintendo's philosophy of costs.  They will probably still lose money on the new consoles, but they are going to try to cut the per console loss down to a much more acceptible number that will make their consoles profitable earlier than they have been.  It will mean a lesser graphics jump than there was from generation 6 to 7, but less of a gamble.  I think they learned from this generation what people expect to pay for consoles.  It doesn't have to be $250, but over $400 is unacceptable.  Storage mediums are an easy area to save some money in R&D.

I give that post a 9.7.

i dont think this generation is that different, the console with less graphical power won, just like with the PS2.

Wouldnt MS buy Sony game divsion MS has way more availble cash for a takeover?

MS nintendo merger would be a sony nightmare

btw when MS pulls out of the console race?

Gears of War 3 may need to go to Xbox 720, but I'm pretty sure PS3 is powerful enough to run it as well.

MS out of the Console race = Party at my house!

This is assuming that they SONY says yes to the money. You can dish out as much cash as you want, but a NO is a NO. If that was to happen SONY would milk as much cash out of MS as possible, if they sell or plan to sell anyway. That's what I believe atleast.