What are the parameters to consoles companies to know when it's already time to start a new-gen?

It depends on the company's aims.

MS released the 360 early because they had the aim of tearing down the mighty Playstation

The Wii was released late because Nintendo aim not for the destruction of another, but for their own profit. A company loses money for two reasons each generation change, the R&D costs of the console, and because if a gamer spends hundreds on a console that has slim or negative profit margins, they aren't spending those hundreds on games that have huge profit margins. As such, Nintendo always try to wait as long as possible between releases, because it saves them (and us) money

well, many articles have indicated that the developers will try to keep this generation going for as long as they can...i dont see a new console coming out until 2015...i feel that the ps3 has a lot of power left in it and despite what some ppl say, i feel that the 360 is still quite powerful...maybe not as powerful as the ps3, but still very powerful...the wii may not be a graphical powerhouse, but the innovative things that they keep doing will ensure that they stay in the console race for a long long time this generation...so yeah, i dont think its time yet...i wudnt want one until 2015 atleast lol i spent too much money on my ps3 :P

The big three are always researching and developing new hardware... it's just a matter of maximizing their current hardware in terms of profitability until it has run it's course, and then introducing a new piece of hardware to the market that provides notable features or improvements and a unique gaming experience that justifies it's existence.

In other words, the time to release a new console is when there's justifiable demand for said console, so there probably isn't going to be entirely new systems by any of the companies for a minimum of 2-3 years, possibly longer.

The main thing they'd look at is software sales.

As the software sales start to decline YoY, then they know that a new system is needed.

Iwata recently mentioned that they ask their game designers when they think they can no longer create new games for the current system that are much better then previous efforts and that's when a new system is needed.

I must be missing something. I thought the time between the release of last gen's console and this gen's console was:

Microsoft the shortest

Then Nintendo

And then Sony

So I don't get where you got that idea.

@ Montana - that's actually a really good example of what I was saying, thanks.

The PS2 and the PS3 had different purposes. The PS2 was designed to bankrupt a company or two (Sega and Nintendo) so it released early. The PS3 was meant to take advantage of the PS2's monopoly to produce some of these ones ---> $, so it was released late.

The GC and Wii were both designed for profit, so they both released late.

Which is why the PS2-PS3 gap is longer

"Ive said this many times if any of them release before 2012 there will be backlash that would most likely lead to a crash this will not only come from the general buying public, but devs, whos asset libraries will be devalued. it would not be good for the industry right now.

we are in actually a pretty good place for all three with software sales being what they are sometime this year all three should put up proffits and continue to do so till the end of the generation.

other things that work against the launch are the recession. the slide of the euro and most world monies against the yen.

on top of that there currently on going major revisions in board and ram design the like of which havent been seen since the mid 90s, this shift should be more defined by 2012 with techs less risky. it also gives time for ISPs to be upgraded and allow for smoother download of full games which is something devs want to kill the resale market (though rental of the game from a download is most likely a devs wet dream rentals on music and games make fortunes)

honestly the only one that could benifit from ending early is nintendo, since they have traditionaly made a profit out of the gate, making people upgrade would just be more cash for them, but killing a cash cow (the wii) is always dangerous. especially a cash cow they are just convincing third parties to try again, killing could harm the next console"

When sales decrease, this gen Nintendo was smart they did it for profit not expecting they would be in first place. Good for Nintendo, a game company should aim for customer satisfaction and profit. Hope 360 aims 2nd place this gen.

i dont think microsoft will even try to make a profit on the 360 until sony is dead. so... never right?