The competition from competing products is really starting to have an effect on the overall game business.

Sorry shio

I agree with Rol. It's the old business model that's dying out, and it's Microsoft and Sony who are going to feel the squeeze. Microsoft have Natal prepping up as their Xbox 360 'relaunch', so they at least have a plan to push more significant momentum into 360. As for Sony, launching the Slim model this early into the PS3's supposed 10 year life cycle may yet come back to haunt them. Can the PS3 stay on the market for 10 years as a viable platform?

Nintendo, on the other hand, have side stepped these problems with Wii. They're in a position to launch a new machine within the next few years. I think we'll see one from Nintendo in 2012.

His "two major concerns" are:  

1) Consumers have a rapidly increasing abundance of choice among low cost games and other entertainment products and;

2) The five-year console model that has driven industry growth in the past is currently not working for Sony and Microsoft.

1.  Many such games are on the consoles e.g. on XBLA, PSN, and WiiWare.  I don't know how he figures this is going to doom the console industry. 

2.  I presume (from the "Sony and MS" comment and from other parts of his article) that he's talking about the expensive-hardware, loss-leader-strategy consoles that have become popular in the last two generations.  Considering that the Genesis/SNES, N64/PS/Saturn, DC/PS2?/GC, and Wii have all avoided this strategy to varying levels of success versus the PS2?/Xbox and PS3/360, I would say that his "the traditional console generation model is doomed" theory seems very questionable, since his argument rests on the disruption of things that have not been happening for most console generations. 

Even if (as seems likely) Sony and MS do not attempt (in their next consoles) to have technology as cutting-edge as what their current consoles had at launch, there is still plenty of advancement to be had by a generational hardware refresh, not least of which may be the new consoles' controllers.  The next generation may (IMO will) start a little later, but to say that the consoles' generational model is going to be totally disrupted is IMO hogwash. 

His argument, in my eyes, rests on seeing the worst [edit:  and unlikeliest] of these situations: 
--The PS3 and 360 style of hardware advancement is unsustainable, so (instead of toning down the tech) the console generations will be torn asunder!!
--Nintendo has a more dominant third party, so (instead of much of that being due to former terrible third-party involvement and there being plenty of slices of an expanded pie to go around anyway) third parties will be crippled in a Nintendo-dominated market!!!

Shio is worried he can`t pirate games on his PC confirmed?

Keep upgrading it and worshiping it,you will still not play exclusive consoles content on it.

The fact that even Crysis 2 is coming to consoles and Blizzanrd is thinking about consoles says so much...but you can`t hear anything.

This is blatant trolling. It's obvious you didn't even read the article.

LOL...Shio....The PC gaming industry has been growing steadly for about 15 years now....how is this news?

Read the article...

But MS and Sony are not leading the console market, they are the losers. Nintendo is the leader and is selling at a faster pace than the PS2, plus the 360 and PS3 is also selling faster than their last gen 2nd and 3rd place.
The market has actually grown and Nintendo is doing well.
The only issue is the Development cost this Gen, and it has cost many companies to go under, but I expect that problem to slow down quite a bit and the 360 sells tons of software to make up the lost.

All this means is that low budget and casual gaming will have more venues, decreasing the need for a centralized console.
Each of the big three have a large enough selection of core and AAA games that this won't be a problem.
Maybe it will compete with those shovel-ware wii games, since shovelware is the only thing phones are capable of at this point and time. ALthough I'll admit that the Iphone and Touch are viable platforms, their games are most similar to DS games.

What is really funny about this article, is that these low cost gaming options are nothing close to what a ps3 or 360 are capable of. Of course, the same goes for the Wii, but phone games are most closely similar to the wii or ds, because they can produce cheap short games and puzzlers in a short amount of time. BUT, the Wii and DS are trouncing the competition.

We all did... it wasnt that long or complex...

The thing is that I agree with scottie... this is market growth we are seeing and that alone is enough to pretty much destory every asumption this analyst has. And lets be honest, 3rd party devs can survive on Nintendo platform, they only need a good method for it. We had already seen many success stories on it, and their numbers will only grow