No. They need to be able to match what the competition puts out, and make sure it actually works. That means they can take their time with their actual release.

Before the next Wii? Yes, before the next PS? maybe.

Last gen:
PS2 120 million, Xbox 25 million

This gen:
PS3 60 million, X360 50 million

Next gen:
PS4 30 million, Xbox3 100 million

J/K. But yes, MS will use the trick of launching first again. Xbox 3 will outselll PS4 easily.

They were pretty emphatic about getting the headstart this gen after seeing what the PS2 did to them previously. I think both companies now understand what a formidable advantage it is to build up an early marketshare. Is a lead a necessity? For aspirations of selling more it is, unless they can repeat what Nintendo did and find a way to offer something really unique that caters to a larger audience than ‘gamers’.

We can't be sure about anything until we see how PS3 sells after a price cut.
And despite boasting self confidence and boldness, MS can't either.
So IMVHO they won't really start taking decisions about launch strategy until March or April 2009 (supposing PS3 price cut happens then).

No. They only thing they 'need' to do is make sure that they don't let the competition launch too long before they do (launch around the same time).

I don't think they need to, but I think they will
Mainly because with Sony's financial position, I don't think they can afford to look at the PS4 for some time yet and need to recoup PS3 costs before they start the expensive process of developing a new console

Maybe I'm not that creative, but right now it seems like making the 720 an upgraded 360 would make the most sense. The dashboard and live would be easy to port, it would be cheap to design and build, and it would give the devs more power. The dev kits would be relatively the same so next gen games could be turned out fast. The PS3 changing everything up and confusing developers really crippled it.

So really, they just have to wait until upgrading the components and paying a little more makes more sense then pumping out the same tech. It really should be a hardware driven decision, rather than just wait 6 years.

THey dont need to at this point, they just cant release too late.

While the "little inovation but way more power" killed the PS3 it seems to work really really well for Xbox. This is mostly thanks to Microsoft's advertising skills and LIVE.

Heck people were betting few months ago if PS3 will pass 360 this year or next one. Now many don't have balls to bet that PS3 will ever pass 360.

A more powerful Xbox being able to play 1080p games launched somewhere in 2010 with 100% backwards compatibility can only be win for Microsoft. Nintendo will probably won't suffer from this but Sony will sure won't be able to sell much more PS3s and I doubt that they will have a PS4 ready in 2010.

I'm currently a Wii only owner but it's almost sure that I will also buy Microsoft's next console.