To those who say that MS should leave the Console market as they have made no money I say:

http://www.joystiq.com/2008/08/19/the-sony-reciprocal-ps3-losses-surpass-ps2-profits/

which references this page:

http://www.1up.com/do/newsStory?cId=3169439

Surely this means that both Sony and Microsoft need to leave the console market seeing as how they've both taken heavy losses with their consoles. The answer is of course no, why?

Microsoft this generation:
- Will sell more 360 then they did xbox

- Will increase their market share

- Will turn a profit eventually

- Will have established a core gamer base to take with them to the next generation in which they'll try and snag the casual market

Sony this generation:

- Will eventually turn a profit for the PS3

- Will be forced to do right by the gamers like they did in the PS1 and PS2 era (get exclusivity, cut console prices etc) as they are now on the back foot

- Will surely gain an advantage with Blu-ray (in some shape or form)

- Knows exactly what went wrong and will do better in the future (most expensive console the big one)

I doubt 1 bad generation of consoles is going to make a company leave the console market, I mean Sega bled out over 2 generations before calling it quits. Seeing as how Sony has only had a bad console for one gen (relative to it's predecessors) and Microsofts is a successful console (relative to it's predecessor), I don't see any reason for ANYONE to leave the market.

@The Fury

When Sony entered the videogame market they too were considered "loaded" compared to nintendo and especially sega. They were making hardware yes, but didn't Microsoft already make the OS for the Dreamcast? Both thought it would be profitable to enter the videogame market on their own...

My point is that I really don't see much difference between the 2.

Also, I think with MS being a software company primarily, and Sony being hardware...next generation will be much easier for microsoft to dominate sony.

I mean, is sony going to annouce a new media format that is going to replace bluray? Or will they invest so many resources in to another CPU after the cell has been such a non factor this gen? I personally think software should drive videogames, not hardware...but thats just me.

Don't get me wrong...its nice to have hardware features. Last thing we need is another manufacturer to stop advancing console features and concentrate on how to get more people who don't play games to start playing games. But concentrating on hardware only is not the answer. Perhaps sony changes their approach by ps4...

the big 3 are here to stay, but a shte market grows their could be room for a 4th competitror, apple?

Thinking about it you are right, fundementally there are no differences, my original point and what i was answering, i might have lost along the way, which was that obieslut said that M$ entered the market to stop Sony from taking over the living room, a place that as a electronics device maker had more rights to then a operating system developer. This confused me somewhat and i tried to answer it, maybe i failed.

Next gen might be easier for M$ to dominate, especially after what we've seen with happen with the PS3 due to it's expense but next gen while MS might go all out, Sony might not, upgraded Blu-Ray (say nigh on 200gb storage disc would be enough) and upgraded and better Cells would be enough, Just would need a better programming arcitecture, for developers. Only upgrading what they have established migh reduce costs, and having the PSN in a good condition will help the move to games being distributed via download as well. Like you say in your last paragraph, i hopethey do change their approach to something similar to the above.

I think next time around M$ will suddenly be battling to try and take the mantle from Nintendo and not Sony but they will need to compete with both, Nintendo for their newly aquired casual market and Sony for it's hardware and home entertainment market. This is what Sony did this time and it's behind and has made mistakes.

Maybe M$ might have a good future in the industry still but it's got a lot of work to do to dethrone both of the biggest console makers ever in one generation.

 I could make my own post, but why?

This sums it up nicely and Microsoft has done enough to convince me to buy it alongside my Wii.  I don't consider that failure.