I think all three manufacturers are currently very motivated to keep their current generation consoles on the market ...

The XBox 360 recently passed the sales of the XBox and is still selling strong, the division is actually profitable and will only be more profitable in the near future, and the brand is picking up steam as being the gaming system to have for "Hardcore" gamers. By the end of 2009 they could release a system that was as much of an improvement over the XBox 360 as the XBox 360 was to the XBox, but if they wait until 2011 (or later) they can release a smaller more energy efficient system at a lower price that is an even larger improvement and they will have a larger fan-base to sell the system to (meaning larger initial sales).

Currently, Sony is in the position where they simply can't afford to worry about the next generation ... Right now Sony's only worried about their bottom line and the longer they can put off R&D expenses for their next console the better off they are.

Nintendo has what I have heard called a "High quality problem" because their amazing success with the Wii and Nintendo DS have lead to impossible expectations. While Nintendo could easily produce a cutting edge gaming platform with an advanced version of the Wiimote and sell it at an affordable price and still perform really well, a lot of people are expecting another gaming revolution. While user-interface research may not be the most costly R&D its problem is that it takes a lot of time ... To evaluate something like voice recognition you not only have to evaluate the technologies that exist and their suitability towards gaming, you also have to evaluate whether people enjoy talking to a game rather than using a more conventional input device.

@jcp234:
Do you know why the console generations change? It's because at a certain point of time the market saturates and stop buying those games and consoles. Releasing next generation system, you'll offer (atleast virtually) something new, a reason to keep buying games, even if it's only a graphical upgrade. For M$ nobody releasing a new console, of course, would be the best option possible, if nobody ever would release a new system, it would leave PC (which largely equals Windows) as the only platform for games. Of course, there's always the possibility, that 360 will be the last M$ console, but if there will be 720, M$ doesn't want to give advantage to competition. Just take a look how crucial the year headstart was between 360 and PS3.

1. Yes it is. But like i just said, market demands an upgrade to new systems after a while. If Nintendo wants to keep making record profits, they need to put out new systems. Besides, releasing a new console doesn't mean the old one would die instantly. Nintendos incentive to keep continuing the current gen exists only as long as their systems sales keep growing. The first year of decline means Nintendo will start looking at a date to release new hardware.

2. Keeping games on their platform is also expensive. To make 360 more appealing than Wii, M$ needs to moneyhat the publishers and the bigger the Wii software sales grow, the more M$ needs to pay for them. The best way to ensure 3rd party support, if you're not the leading one, is to get your next gen console out before the competition. 360 gained alot for having a year advance, just like Sega with Megadrive back in the day.
Unless M$ does something, 360 will end up to a situation where 3rd parties don't care about their relations with M$ (think about Nintendo last gen).

3. M$ isn't going to make the money they have lost in consoles back this gen.
What really worries investors is, that is M$ going to go forward. If you're not planning to keep up with the future, the investors know that the whole business venture is a dead duck in the water.

4. They definately remember. But, to prove that the Xbox platform is viable, M$ just doesn't kill 360 when 720 comes out. When M$ killed the Xbox, it proved to investors that they actually aren't just pouring money around, but want to make some too. Keep in mind, that during the Xbox, the games division had only one profitable quarter, the one where Halo 2 came out (and right in the next quarter, they lost that money and some extra).

When you think that PR, what they actually are saying, is actually contradicting their other PR. They say they focus on "hardcore", while this PR says that M$ isn't going to be the (first) one to deliver to the "hardcore" and that after 3 years, with 360, you're playing with the most outdated system.
Look at it, when someone tells they're working on the next gen system, they tell the consumers that "we are going to deliver" when Bach implied, that "we won't deliver". Why would you buy a platform that has uncertain future?

Sure every one of the three has their incentives to keep this gen going as long as possible, but each also has a number of reasons why they would want (have) to upgrade (early).

Time will tell what Microsoft will do.

I also agree with the logic of another poster...it would be better for Microsoft to wait to release their next gen consol...when more advance technology that will exhibit greater improvements over this generation will be available at cheaper costs.

Did he actually call it the 720?

well MS does not work with a very long forseeable future do they? they announce games like 8-12 months from before theyre released, forseeable future means more coming from Nintendo and Sony

I get the fact that you are making a conscious attempt to discredit Microsoft, but your post makes very little sense.

Maybe you can elaborate if you are capable of doing such.

2. Keeping games on their platform is also expensive. To make 360 more appealing than Wii, M$ needs to moneyhat the publishers and the bigger the Wii software sales grow, the more M$ needs to pay for them. The best way to ensure 3rd party support, if you're not the leading one, is to get your next gen console out before the competition. 360 gained alot for having a year advance, just like Sega with Megadrive back in the day.
Unless M$ does something, 360 will end up to a situation where 3rd parties don't care about their relations with M$ (think about Nintendo last gen).

3. M$ isn't going to make the money they have lost in consoles back this gen.
What really worries investors is, that is M$ going to go forward. If you're not planning to keep up with the future, the investors know that the whole business venture is a dead duck in the water.

2. Microsoft doesn't need any special sauce to keep games on their system. They already proved they can sell 3 heavy shooter releases in a holiday season quarter and give each and every one their dues. They proved they can support 2 WRPGs released back to back on their system along with many other heavy sellers. Third parties know they get a good deal with the Xbox 360, so why wouldn't they continue to support their system when Microsoft goes out of their way to support the third parties? They have no real conflict of interest between 1st and 3rd party studios so they are in a unique position and long term im sure the Publishers apreciate that fact.

3. They are making money back fast enough to justify to themselves that the ROI is better than leaving it in the bank. Thats the whole Xbox venture, not just the Xbox 360. Also now they have established themselves finally, who knows for sure what direction they intend to take the Xbox in the next generation?

Good. Keep the gen going for a nice long while.

Thanx for taking the time to provide your rebuttal, I really did not wan to put in the effort to point out the flaws in logic.

The longer they can keep it on the market, the longer that gives PS3 and the amazing titles that are in its future to pass the 360 which has already had its peak game years imo. I'm sure their plan calls for getting it out by Gears 3's launch because they don't have another game capable of moving a $500.00 super system other than Gears especially since Bungie is done with Halo after ODST.