Let's forget that the original Xbox's life was cut short last gen due to getting an early hit with the Xbox 360. That was the reason there was a shorter span than would be normal for Microsoft. It seems like this gen is going to go on for a longer period than normal. I can't blame companies for wanting to recoup as much of their losses as they can, and it would not be a great idea to announce a new console when people are more worried about putting food on the table. I do hope there still is a graphical leap though with this long wait. What will be the point of picking up an Xbox 720 if it is minimally stronger than the Xbox 360? So, is this gen going longer than normal because of lagging sales this gen in an uncertain economy?

I think the massive financial losses by anyone not named Nintendo or Activision-Blizzard that preceded the recession are to blame. The economic slump (which should have been taken as an opportunity by the gaming industry) is almost an afterthought.

It could be a combination of the two.

If anything extends the generation, it will be the fact that Sony and Microsoft overshot the market tech-wise, and can't bring an affordable leap over current technology in the normal cycle, that plus Nintendo's ability to minimize the effectiveness of technical improvements.

I would say no, the HD consoles' failure will only urge a quick change.

Of course, Sony and Microsoft would love to keep the current consoles for a decade, but decision is not theirs. If the consoles sell badly, they might keep them on the market, but they won't sell more. It's always the most popular and successful console that gets a chance to stay longer.

Look at the sales of ANY past console. The last years of the generation always had decreasing sales, even before the successor's announcement, when the consoles got old. What we are witnessing today is the effect of the recession, COMBINED WITH the natural ending of a generation.

While they have no reason for major processor upgrades, they still need to release something new, to keep the gamers interested.
Motion controllers are one way to go, but unless they take them seriously, with an actual relaunch, and powerful lineups of exclusives, they will not have an impact.

I'm fairly certain he meant from a financial perspective, in which case he is indisputably right about the PS3, and borderline right with the 360 (although the latter may end the generation with a profit).

I disagree, I think Sony will keep the PS3 viable for as long as they can.

They are slowly extending their user base, and I think that they can keep pushing digital distribution upon their user base for a long time.

I think that they will keep the PS3 on the market for however long it takes for it to become profitable.

You are right, "failure" is not the right term.

Losing billions of dollars for being third and second? "Catastrophe" would be more fitting. 

By "ending", I meant that we are already 3-4 years into the generation, that has no reason to last more than 5-6 years. Of course it won't end for another year or two, but it is closer to its and than to its beginning. 

Also, since this generation isn't over, I think it's going to be difficult to deem some consoles a "failure" until it is.

Who knows, they could chug on this way for another 5 years and become a success.

Well yeah if there was no recession all console would be doing a lot better.