Everyone is waiting for the next gen to start, but it's not gonna happen anytime soon, know why? Because Microsoft still needs to make billions and billions of dollars to break even on the X-Box brand. Last year they managed to make half a billion on the 360. So at that rate they should break even in about 10-18 years. Sony of course the PS3 has set them back billions of dollars no doubt they did not expect to be in 3rd place at this point. 

So think about this: Both the PS3 and the 360 are many times more powerful then the Wii- but the Wii outsells them both combined. So why would MS or Sony spend another few Billion launching a new console that's even more powerful when the least powerful console is spanking them both? No they are going to milk their investments for as long as they can. When you think about it in that context then a PS3 pricecut makes more then enough sense. The Wii and the recession ensure that this gen will last at least until 2012,  but perhaps even longer. And each PS3 sold is not just people buying games from Sony but bluray etc. for at least another halft decade but perhaps longer.

Plus think about a Wii HD: what would that look like? Given that Nintendo has dropped out of the specs pissing contest a Wii HD could basically be the same power as a PS3. If that happens what you have is Sony using the PS3 for 2 gens straight and actually "skipping" the next gen. It's userbase would become huge ensure that bluray is widely adapted and gives them more then enough time to make back the money that they lost. Microsoft had a great advantage being early this gen but if they release the 720 (or whatever it will be called) too early it could wind up the next Jaguar. Like Sony there is no incentive for MS to make a new upgraded console while the Wii is still on top.

People might think I'm crazy for thinking this but those people are lacking in foresight imo.

If Sony skips a gen MS will also, now they have Natal and stuff.

And if Nintendo skip a gen then there won't be a next gen .

The PS3 can get a pricecut, but people have to want the system, have the last 3 years taught you nothing?

360 and PS3 don't have a chance against the "underdog" Wii and you think they will against a Wii HD?

No way, Sony and Microsoft most likely have to refurbish their hardware, upgrade it a bit (just like wii - gc) and relaunch it with motion sensing control and forget about the money they've lost on PS3 and 360...

One of the biggest driving factors of the videogame industry is the development of new experience to maintain consumer interest. While I agree that the processing power of the HD consoles is adequate for several more years, they have already reached a point where most of the gameplay experiences they're producing are (basically) the same as something that has already been produced this generation; and it is only a matter of time before gamers are looking for new experiences which aren't available on these consoles. Certainly, Sony and Microsoft may try to maintain interest through add-ons, but it is difficult to create and market a successful add on and even the most successful add-ons have very limited support.