Marked. And what's the release with a new system have to make anything a non-issue? but please, this is not intented to be a question for madskillz, since he obviously gave his answere already. I just wonder, isn't the point of any system to make profit for as long as it can be on the market? If the PS2 is still on the market is because it can turn a profit, whereas the first Xbox is not, and the reason is obvious. The PS3 won't EVER turn a profit for Sony (in LTD sales), and anybody who visits videogame sites with a passion as I would deem somebody like madskillz (who I believe it's more into this than most of us) should know this, since Sony itself have admited it! Sony has lost so much money with the PS3  it's very likely even after 10 years (2016) they won't see a very significant return. With that out of the way, now let's find some logic on these marked words. Dominant companies of the past, both Nintendo and Sony, never had the unrgency of releasing new hardware. When a product is the king with close to no threats, there's little incentive to invest in R&D and new hardware and jump to another platform and inevitably start phasing out your current king. But all products die, even kings. The point is how they die.

Nintendo phased out the 8-bit NES, but not after Sega (and others like NEC's Turbo-16) had taken the step first. Same happened with the SNES. Later the PS1 saw the Dreamcast take the lead, and the PS2 saw the X360 inaugurate the current generation. Of all the previous generation consoles I only know of 2 complete failures that were rapidly discontinued, those are Sega's Saturn and Microsoft's Xbox (Sega Dreamcast lived long in Japan, officially discontinued in 2006). In the case of Sega, the Dreamcast failed to be their saviour after one big loss, and perhaps at the end of its days it got some earnings, but it didn't improve Sega's situation. Microsoft lost over 4.5 billion with their first attempt, all that money coupled with more than 1 billion spent in manufacturing issues with the 360 is no cookie to be taken lightly. They are making a profit already, that's right, but do we know how much? How much are they gaining after their latest cut? Is someone forgetting here the 360 is sold at $200 in 2009? A quick googling will reveal you what kind of sales you could expect of a "healthy" console selling at this price, even more so 5 or 6 years back. Is Microsoft "stealing home" today when they had such a big holiday season with a price point of $199.99, but even with that price point they are not outselling their competitors 2:1 or close to it? How long will it take now to make the real profit a company like MS would deem their GOAL with a system they have invested so much in? Could they afford to just phase out the 360 in 3 years? will the 360 by then have reached the level of profit is expected of it? People like madskillz seem to believe they could trash the 360 like yesterday's paper sooner rather than later. I think is too soon to be speaking in those terms, big investments are expected to return big profits. It's how it works or they are put off. The PS3 will very well live to be 9 or 10 (as of now, they are save, but barely, it could change of course nothing is definite), it's doubtful it'll return even half the profit the big suits dreamed of it after all those years. Make no mistake, Microsoft is not a bunch of fools or sporty chaps, they won't substitute their cow until every one of its tits go dry. As for Sony, they will surely release a new videogame console just in time NINTENDO starts preparing a new one. You can mark MY words on that. It's Nintendo the leader anyone with 2cc of gray matter will look up to.

You're forgetting some important concepts!

1. There is greater price elasticity within the Xbox 360 brand than cross price elasticity between the Xbox 360 and PS3.

2. They can easily sell both the Xbox 360 and Xbox next at the same time and quite frankly they will be better for it because so long as people still keep their Live subscriptions they are raking in the dough.

2a. Just because a new generation is released, doesn't mean people stop buying games etc for the old console.

3. You're comparing a console with market winning dominance to another which is merely doing well. The Wii completely kills any console you would wish to compare it to and it is the strongest console to date which makes success in this market difficult.

lets just wait and watch lol the best of ps3 is yet to come:)

You know, that's interesting.

Mainline Final Fantasies have *always* been on the mainstream console. Nes, SNES, ps1, ps2. So we don't know exactly what will happen. For all we know, it might be another GTA4 - it's one of the biggest franchises in gaming, everyone thought it'd move tons of hardware and... well... it didn't.

Notice I'm not saying FF won't move hardware - I'm just saying it's not necessarily a given, considering what we've seen in the last three years.

GT5 is a much surer bet, of course. It's the biggest playstation franchise.

Console online? Yeah. Do you think Sony would have a fraction of their current online offering if not for trying to catch up to Live?

Summer of 2008 I began to believe that the PS3 might catch up to and pass the sales of the 360. However, I now believe this isn't going to ever happen, and for two primary reasons:

1. Standalone Blu-ray players are falling in price faster than the PS3, making the PS3 less compelling as a standalone Blu-ray player for the mass market. This will continue as there isn't any way for Sony to sell a Blu-ray player and high-end game machine combo as cheaply as a standalone Blu-ray player without losing money, and the Blu-ray component costs are likely to fall faster than other PS3 component costs as Blu-ray devices (computer players, computer burners, standalone players, etc.) proliferate and drive manufacturing costs down.

2. Lack of BC in any PS3 model being sold. My brother has a sizeable PS2 game collection and has been waiting for the PS3 to drop to $300 to buy. When I recently told him the bad news, i.e. - that he would have to keep his PS2 around to keep playing his PS2 games, he was shocked. He has limited space in his living room entertainment center and was going to "swap-out" his PS2 with the PS3, just as he swapped-out his PS1 with his PS2 years ago.  Not to mention the hassle of having to maintain two consoles just to play "PS" games.  He went to the GameStop down the street and asked them before he would believe this was actually true. He planned the PS3 as his PS2 "upgrade" and to get Blu-ray thrown in for free. Friday he purchased an Xbox 360 Arcade to get Gears 2, Halo 3, etc. and is putting off a PS3 purchase indefinitely.  He had to get really creative with his entertainment center arrangement just to find a place for the 360... even if Sony added BC back in, he wouldn't have room for the PS3 now considering how big the PS3 is.  Perhaps if they made a slimline as small as the PS2, with BC...

The PS3 is doing well, and I expect Sony to keep producing the system for a few more years, but I'm not sure there is anything that Sony can do to get the console out of third place this generation. However, I've had a change of heart about nailing Sony to the wall on this. Yeah, they took a gamble by producing such an expensive machine, but that's what often advances the state-of-the-art in technology... taking a chance on something no one else has attempted before. Apple did it with the Mac. IBM did it with the first "PC". Etc. Etc. Hats off to Sony for pushing the competition really hard, even if it didn't win them this round.

The gap is a paltry 8 million. For comparison, the gap last gen was 116 million. With a good price point, software lineup and marketing the PS3 could easily destroy that tiny sales gap. It may be improbable but it is foolish to think that it is impossible.

 So your brother didn't have room to keep both PS2 and PS3, but he had room to keep both a PS2 and a 360? did I miss something here? He was not buying a PS3 anyway, it was not a matter of room. It was not a matter of BC either, since I believe the 360 can't play PS2/PS games...

Dude, I have a PS2 - a sizeable collection of games - and my PS2 is on the fritz. My 20gb PS3 plays my PS2 games and I am happy for that. I wouldn't buy another PS2, though.

What am I saying? Folks with PS2s now have two next-gen systems that have one thing in common - neither will play their huge collection. Based on that, why should they continue to stay with a console maker that felt Blu Ray was necessary for gaming and their last-gen games aren't? The 360 offers a much cheaper price point and even some limited BC.

Sony shot themselves in the foot by removing BC.

^limeted BC no one cares about. And why would they care about the PS3? maybe to play PlayStation games? I completely agree they screwed up by removing BC. Still, I don't see any conection between that and deciding to buy a console form the competition. Price point you say, now that's a significant point isn't it?