Yes, I meant the Xenon.  The point is that creating the Xenon from the stock PowerPC was not easy, nor was it cheap.  You think MS will sink the kind of $$ necessary to reduce the Power7 core to console levels next gen, when they are probably going to shoot for the Blue Ocean, and not the hard core?

Actually, no, they are not. IBM already has working 45nm Power7 chips with 16 cores and ATI and NVidia already have GPUs more powerful than the ones I listed. None of these components are revolutionary, they are simply evolutionary. I expect the Cell2 and Power7 CPU to be 45nm and the GPUs to be 55nm or so. They are not anywhere near the situation you described. 

Actually, the PowerPC cores in the Xenon are very simplified versions of cores which IBM sells to their customers. Developing the core was difficult for IBM, making the Xenon was not. IBM is already putting in the money to develop the Power7, removing OOE and other components is not hard. I think you are a little out of touch with modern hardware.

So... they are cheap enough to produce en-masse at 45nm are they?  And they run at 4.2 GHz?  Sounds great!

I think people look at how Sony and Microsoft approached this generation as being a typical approach and how Nintendo approached this generation as being unconventional but I'm not certain that these are entirely correct ...

In 2005/2006 what would have been a very conventional console in the style of the PS2, Playstation, Gamecube, N64, SNES, NES, Dreamcast, Genesis and Master System would have been much smaller, less expensive, and had dramatically lower energy consumption than either the PS3 or XBox 360. The performance that would have been possible from a system like this would have resulted in hardware that was capable of producing the advanced graphical techniques of the PS3 or XBox 360 at standard definition, or producing graphics similar to the Wii at high definitions. While I don't think people would have rejected this approach, this is a very awkward position to be in.

While the Wii is a smaller graphical jump than was typical of a generation, many/most successful consoles have been "obsolete" technology that has been (well) marketed to convince people that it was cutting edge. In contrast, few consoles have ever cost so much while their companies lost so much in order to have larger, more powerful and less efficient hardware.

In the next generation I expect all three manufacturers to return to a position which is far more typical of a videogame console. While I'm not going to try to predict specific specifications, I imagine that this would be modified hardware that was somewhat similar to reasonably high end PC hardware from 18 to 36 months earlier ...

Of course not, they are fairly new. However, the 6 core power6 cores are pretty cheap to produce en-masse and they can run at 4.7Ghz. These cores were released only last year, with Power7 coming next year. Now tell me, why isn't this fissable? Especially since IBM Power7 have dual 8 core chips on a single die. A single 8 core chip will cost less than power6 does now, especially at 45nm.

both will be able to run crysis on high.

except the wii 2 at least. but its too early especialyl since not many info

sony it's working on dual core/quad core cell with multiple SPUS each core.

and microsoft will likely use whatever IBM have or intel (no likely unless they want to kill backward compatibility).

for GPUS all three console will get pretty much the same. Direct X 11 - 12 - 13 capable opegl 3 - 4 -5

Yeap, that pretty much falls in line with Power7 and Cell2.

On a side note, I just realized that I never fully explained why I think Microsoft will want a powerhouse. Last generation Microsoft wanted a CPU that IBM simply couldn't deliver. They wanted a tri-core CPU with OOE. IBM couldn't deliver that so they settled for tri-core with IOE. A Xenon with OOE would be 50-100% more powerful than the one in the Xbox 360. It would have given Microsoft both a more powerful CPU and GPU. I can't shake the feeling that Microsoft will seek a powerful CPU again, especially since the Cell processor is the main thing Sony brags about.

Actually Nintendo will make their next system stronger than the competitors, Microsoft will make theirs powerful than Sony. But in the end it's Nintendo, Sony Microsoft.

As much as I would like to believe that, Nintendo would be a fool to alienate the casual crowd it worked so hard to reach. They are not willing to take a loss on each console sold, so that means the console has to sell for a cheap price. Unless of course, Nintendo tries to get 95% market share by releasing the most powerful console at a huge loss to attract everyone lol.

I wouldn't change too much for PS3 and 360. Just increase RAM, processing efficiency, disc read rate, very high range built in wireless, and good hard drives. I would leave the main processors alone and just upgrade it to allow for a cheaper entry price and not kill the R&D divisions at Sony and MS.