I have heard about two posible scenarios:

1) The hardcore apocaliptic one which I disagree with. According to this vision, developers and publishers will stop creating deep inmersive games with great graphics and thousands of hours of gameplay and start developing shallow simple flash pick and play games. Why? Because the userbase of the HD consoles will be to small compared to the Wii and DS, so it will be faster and more profitable to produce games for consumers like our moms who can be easyly satisfied with very simple games. The realism in the graphics and design required to satisfy the small "hardcore" HD userbase will be slower and too expensive to develop. As a result there will be hundreds of casual games and no more GTA's, Gears, Final Fantasies, Zeldas and so on simple because it will be a bad business. The end of gaming as we know it.

2) The Casual and hardcore "everyone wins" scenario which I tend to agree with. The logic of this vision is based on the market economy and a comparison some people make with other entertainment businesses like the films industry. Thanks to Nintendo and the expansion of the Market, it will be more resources to produce more and different kinds of games. People who didn't buy Video games is doing it now and will continue to do it. There will be more houses with video games consoles, different kinds of them, and gamig is going to be seen like a social, healthy, good for you and everyone's activity. Just like the movies, publishers and developers will create games for different audiences but they will still have games like Gran Turismo, Mass Effect, Metroid Prime, etc, to satisfy the most "hardcore" tastes. In fact, the next generation all consoles will be HD and will have some kind on motion sensor controller so every kind of game can be played on them.

So... Which one of this two possible futures do you see more likely to become a reality?

1) The apocaliptic one?

2) Or the "everybody wins" one?

And more importantly ...WHY?

Everyone wins. Companies could use "casual games" to fund bigger projects. I think Ubisoft said that they are funding their PS360 projects with wii casual games, so it is happening already.

I would ask: what kind of business funds expensive, losing products with cheap, high-selling ones? The answer is a bad one.

The companies that follow this type of model will find themselves falling behind the competition and doing nothing but producing a lot of juicy IP ripe for a takeover by a company with a better business plan.

Now I don't mean to say the apocalyptic scenario will win. I think the reality will be somewhere between the two: the big, immersive games are going to have to trim their budgets to remain competitive with the new "casual" games. I'm just saying I think the plan of funding big projects with the casual ones is a recipe for business suicide.

It mostly tells sony and microsoft cant expect to push a 600 dollar machine on consumers and expect all but the loyalist to buy it. If anything the next gen tech wont be as drastic and as pricey as this gen, and gives developers and publishers some breathing room, which i am all for.

Talking about how HD consoles will die is redundant. The second Wii will be an HD console and then what? The Wii is prospering due in part to the fact that few people have bought an HD tv so far. Nobody can predict what will happen next generation right now.

If you take a look at the top selling games on the Wii you'll see that the majority of them are traditional games like SMG. They still have the potential to sell millions, look at COD4, a traditional hardcore online FPS: it's sold incredibly well. If you think next generation is going to consist of only minigame collections/waggle-thons you are sorely mistaken.

Good bye core developers and producers and hello expanded developers and producers, good bye SquareEnix, good bye Master Chief, so long Solid Snake, later Capcom.

In otherwords this is more about producers and developers than it is about the fans now, the change has happened in the market, core is no longer core and the expanded audience is now Atlantis, to Nintendo the core fan is yesterdays news - their is a much larger market and they will make old core games expanded audience centric. Fill it with a lot of content, Iwata is pushing the user generated content envelope along with Will Wright, so I'm waiting for the new Zelda or Mario to see this user generated content in action.

I'm also looking forward to the Nintendo video on demand channel, as it means that Nintendo may be willing to take up responsibiliity for on going revenue through service, a total shift for them, meaning a higher chance of a poke'mon' MMORPG. If they can find a succesful model.

also i would like to add that with the high price of development of games on HD systems. The wii offers an alternative to smaller publishers and developer to rise. I'm not talking of games through wiiware, psn or xbla, i'm talking through actual publish title. We will see many talented studios and IPs created in the coming next gen as well as studios and publishers downfalls who are not able to cope and yes i do have personal interest in the rise of small creative studios, since a bomb on HD could mean the end of your career.

Casual game projects are lower risk titles you put out to make some money and be profitable. They don't have the same chance at a large payout like a AAA big budget title does. Those titles are now positioned to become franchises, set to sell additional downloadable content to and make a bunch of money off of, as people await the sequel. The big budget title have companies swinging for the fences, and have potential payout FAR larger than the casual game projects. Of course, the risks are higher, and if done wrong, they could sink a development company, the way Haze did with Free Radical. And I believe Lair did to Factor 5.  Done right, and you get a franchise with a hoard of eager fans that will sell millions, if you execute properly.

Console makers needs SOME big budget titles to promote their consoles and hype up.

I see 'core' games existing and the quality remaining. However I think the volume of 'core' games will decline. For example I would expect to see perhaps 6-ish core games for the Wii 2 in its entire life cycle compared to the dozen or so that are out or will be out (depending on you p.o.v) for the Wii. I also expect the expanded audience to dictate the industry to a larger degree and I expect to see more Nintendogs & Carnival games than there are now. This isn't necessarily bad. I have enjoyed throughly titles such as Big Brain Academy, 42 All Time Classics, Nintendogs and certain deveolpers may be able to get the quality currently lacking from games targeted towards the expanded audience. There will still be shovelware, and in larger amounts I believe, because the Wii has shown quality doesn't necessarily sell. Its all about casual appeal. Nowadays even a bad game can be profitable. The domination of the DS & Wii has shown the core gamer is somewhat irrelevant and in doing so has made game quality redundant. So I believe that the day's of the core gamer dominating the gaming audience are coming to an end. Halo, Resident Evil, Legend of Zelda, Metroid, Gran Turismo & Gears will still exist along with gamers to play them but they will be relegated to second-tier citizens. Maybe in a few years even the gaming media will expand and be dominated by the expanded audience. Judging by its current status (especially the review system) that may be a very good thing indeed. I think the most important thing is too keep an open mind, support core games where possible and enjoy the fact that with our hobby becoming mainstream it should mean less ridiculous law suits, legislation, stereotyping and media bias. Sorry for the long read.

Everyone wins. Here is one simple reason: the market for "hardcore" games isn't going anywhere. As long as that exists, people will continue to make those games. If everyone makes party games, nobody will make any profit from their games.

Logic and simple economics...just think about it. Gaming as we know it is here to stay.  There may be more casual games around, but they will be added to the market, they won't take anything away from the core games.

I also wouldn't be surprised to see more games made for everyone.  Like Mario Kart Wii, or World of Warcraft, that can be enjoyed by causal or core gamers. 

Spore utterly failed at this, and only really appeals to casuals.  It could have been so much more, without sacrificing sales.