The Gamecube -> Wii transition was exactly the transition I was thinking. However the key difference is that it would have to be a soft generational chage rather than a hard generational change. With the Wii Nintendo only had 24M consoles sold and they had the other console manufacturers releasing in short order simultaniously so the whole industry and consumers supported and expected the changeover or at least accepted it. With upwards of 40M Xbox 360s sold and many sold recently they have quite a young and plentiful userbase whilst the Gamecube did not. This is the reason why I believe that both next and current generation will be supported simultaniously, perhaps even initially with the same media. They have every incentive to release a new generation of consoles but at the same time they cannot afford to orphan the current userbase.

The goal of an Xbox Natal is to aquire users they could not have otherwise obtained with the current marketing/product mix of the Xbox 360 IMO. So I would suspect they would use seperate branding to distinguish between games designed for the Natal camera and games designed for the standard controller. They could colour code them to tell people which is which. Say the current green for games designed with the standard controller and white (Wii) or blue for games which are playable with Natal mainly or exclusively. So they could call it Xbox 360 Natal or whatever name they chose and any Xbox 360 games would be playable on both but only Xbox 360 Natal games could be played on that system and beyond that using a colour code to tell people which interface was best used for the games. That seems like the best system I can think of for them to support both userbases at once.

I would say that it would be a pretty good idea for them to release updated hardware at the same time. I would suspect that they wouldn't go for a HDD, however fast flash would make sense as it doubles as larger and slower additional pool of ram as well and that unifies the Arcade concept with the Premium at a lower price.

Im not sure about making Natal mandatory, but I concede that its probably the only way to get developers to consider using and forcing them is the best method. Though best practices aren't always maintained, somewhere in the design documentation is a requirement that all games be 720P with 2xAA which means a lot of games don't fulfill the Xbox 360 requirements.

So you want the Playstation brand, which has lost the largest percentage of market share this generation, to sit the first two years of the next generation OUT, allowing thier competitors to fight for 100% of the then "next-gen" market?

I'm sorry I don't follow your logic at all, and for Sony's sake, I hope they don't either.  I think Sony made some fundamental mistakes this generation, but I expect their next console team to learn from those mistakes and the PS4 to be that much stronger for it.  I also expect them to aggresively compete for every percentage of market share.  Do they launch day and date with the new Wii or XBOX?  Maybe not. But two years later?  That would be a recipe for disaster.

Chances that sony won't release a PS4 - 0.0001%

I think the next Sony console will come bundled with motion controls and be called the Pii - why not, the controls are already copied, might as well take the name too

Seriously though, I think that the PS3 will stick it out till about 2012 at least, if not 2014. I think that they'll pull the PS3 10 year plan short by 2 years.

Wow, thanks for putting in some blatant misinformation in the first sentence, ensuring that I don't waste me time reading the rest.

ok M$ has stated that natal will work with EVERY xbox 360 that is out therefore no new console or upgrade...... unless all the new games work with the old system.

They also said they are not even halfway done with this gen.

so all this talk is pointless.

@Squilliam: Let's put it this way: internal memory in size of tens of gigabytes.

It was 720p/15fps minimum. But what i understood, it was the output, not the native resolution of the game. Well, you propably are more familiar with the subject that i am.

All 3 will have brand new consoles, not any time soon though.