I think the idea of a 2010 launch of a new X-Box is likely the most realistic. I know I myself would never buy a new X-Box if it was launched in 2009 (Unless the specs were unbelievable and price to match). The idea that most consoles tend to enjoy a roughly 5-year life span means that Microsoft could once again get the jump on the competition.

The only flaw in the strike first strategy. Is that your competition can adapt their products to provide consumers with a superior product. Namely look at the PS3 delay after the Wii and 360's secrets had begun to flow. As Sony rapidly adapted their console in a desperate attempt to produce superior hardware.

In the end Nintendo's disruptive Wiimote and casual software drive managed to kick butt. Microsoft's gains have been caught and Nintendo is now the dominant force only a year into its lifespan.

My bet is that Microsoft will reveal their new X-Box at TGS or Leipzeg 2009. Now many will say what not at E3. First E3 is too early in the year second E3 is still downsizing and may not be an efficient launch pad for a new console. If Microsoft were to announce the new X-Box in the fall of 2009 they wouldn't have much of a negative impact on Christmas sales and they would be able to directly target the Japanese user base the first two X-Box's have failed to capture.

So when do I expect the competition to launch their next volley of consoles and why?

Fall 2009 - Next X-Box unvieled to media and customers
Fall 2010 - Next X-Box launches

Microsoft sees an oppertunity to yet again lead a pre-emptive strike against the competition. Microsoft's first move will work yet again in its favour when pitted against the PlayStation3. Microsoft's console will managed to slow down sales of the competitions consoles. Microsoft will likely also target the casual game market that Nintendo dominates with a Wiimote style controller.

Summer 2010 - Next Nintendo console announced
Fall 2011 - Next Nintendo Console launches

When Microsoft reveals their new console and the PS3/360 continue to become far cheaper Nintendo must adapt and come up with something new. The Wii will have likely hit the 99$ price point and Nintendo sees they must enter the HD age. A new fully HD Nintendo Wii style console gets revealed fully backwards compatable with the origional Wii. This new Wii will likely also feature at least one new innovative feature to help it continue to drive the industry. The new Nintendo console will likely pack a pretty punch (Litterily pretty)

Spring/Summer 2010 - Next Sony console unvieled
Spring (Targetted) but Fall 2011 - Sony's Next console gets released

Sony will likely fully reverse its PlayStation3 strategy of going big or going home. Expect a far cheaper PS4 quit possibly a digital distribution console relying on a hardrive and online to purchase and play games. Expect the PS4 to be just a slight graphical improvement over this generation following inline with Nintendo's Wii strategy. Sony's new console will likely feature some ground breaking new hardware as well as a mimicky Wiimote.

So in the end I expect Microsoft to maintain its higher end reputation it has had since the X-Box. Nintendo to maintain its current price stance but to adapt visually to the competition. Sony will change its policies back to the PS2 cheap , cheaply made and cheaply distributed.

Don't you mean the Enlightenment? I'm a historian, and there's no such thing as the "Enlightment".

Microsoft is (likely) going to want to take advantage of the 45nm process to (greatly) lower the manufacturing costs of the XBox 360 and sell it at a more mass market price before they move onto the next generation; they will probably be able to move to a 45nm process in early 2009 so I would imagine they'd be looking to release their next system in 2011.

I doubt that Microsoft will release the next XBox in 2009 because they actually have a better piece of the market with the 360. To me the early release of the 360 felt like a desperate attempt to put the XBox into the back of everybody's mind--especially after they pretty much discontinued any support for the XBox so soon--and be the first company with HD gaming, and it looks like it worked (in US/EU anyway). Now if they jump the gun and release the next XBox in 2009 it is going to have that same feel and people will probably criticize them for having a laughably short console cycle like they did last time around.

I just don't think that Microsoft stands to gain that much much by releasing in 2009 as opposed to 2010 or even 2011, and I know that personally I would be disappointed if they did.

At the rate they're going, it won't be a whole new console...

...it'll just be a new beefier 360 SKU.

MS is in stronger position than they were last gen. I wouldn't expect a new X-box until 2011. At earliest 2010, but I think all three manufactures will be launching together in 2011. MS is going to want 6 years of the 360 as its main console to ensure profitability.

I think it is a no-brainer that microsoft will show up early to the next party. Microsoft has proven that they are not innovators but rather great at taking existing ideas and bettering them just enough to take over the market. There are three things at play that are "maturing" at the moment:

High Definition Displays. They still are only in about 30% of households. In 3 more years, that number will be more like 70%. Graphics will be even more important than they are today.

Motion Controls. The Wii has proven that (in some titles) the motion-based controller is exceptionally fun. Expect that Microsoft will refine the Wii Controller for their next console. It will have faster response times and greater accuracy than the current WiiMote. Add to it the higher horsepower of the console to track and display movements in real time and you will finally have 1:1 motion control.

High(er) Definition disk formats. It may be HD-DVD and it may be Blu-Ray. Or, it may be something else entirely. Whatever "it" is, prices will have come down by then and inclusion in the console won't be the price buster like it was for the launch of the PS3.

If Microsoft maintains 100% backward compatibility and the architecture says similar but with more overall horsepower, developers won't be upset as long as the development tools are ready out of the gate...

I don't think there is any question that it will happen by 2010, but I do believe timing will be based on how the PS3 fares in the coming year. If the PS3 begins to outsell the 360 significantly on a worldwide basis it will be sooner no doubt... If the 360 takes down the PS3 this round, I suspect they will push it out a bit...

As a few have said the next 360 would have to be programatically compatible and backwards compatible with the current 360 to come out that early...

That way developers could develop 360 games that worked on all 360 versions or develop for a new version that probably was Multi-DVD (HD, Blu-Ray, DVD9) based, and had a wilder video GPU and extra processing power for games that are coming on the PC (Ex. Crysis).

But I think it will be based more on market conditions then on a cycle that Microsoft wants... If 360 is going strong, they may opt to delay and put another year into R&D, but if PS3 is winning then such a move might work if executed properly.