Powerful hardware can be an asset too, as it decreases the pressure to optimize your games because of hardware limitations.

Powerful third party engines will make it easy for anyone to make good looking games cheaply.

Just look at what mod teams accomplish on PC, great looking mods because the engines and toolsets become easier and easier to work with while still allowing great grafix.

I want to be able to play a game that looks at least two or three times better than Uncharted 2 with 4 player split-screen at 60fps. And I don't want the console I'm playing to cost me more than $399.

Somehow it's perfectly possible to make PC version of DMC4/RE5/ME (or any other game) which runs amazingly well on pc in full HD @ 30-60 FPS without breaking the development bank.

So I wouldn't be too worried about cost escalation with this.

As for what i expect from next gen machine - 1920x1080 with AAx4 @ 30 fps or no AA @ 60 fps. Give me that and I'll be happy.

@ Garcian

I agree with the point that the graphics jump will likely be far smaller than in previous transitions and that differentiation will become a major focus amongst the console makers.

I wonder how big a role 3-D games will play in the next gen?

i'm against Digital Distribution if it means selling 2-3 year old games for the same launch price.
either digitally distributed games for 30-40$ with no price cut, but deals once or twice a year or digitally distributed games for 60$ at launch and price cuts every few months with ability to buy just singleplayer(with co-op) or just multiplayer part of the game for about 20$.

Next gen will have 8-bits...and we'll play 2D games etc...famous games in retro style...

That's what it'll mean for consoles.

Digital distribution works on the PC platform because there's various services that are constantly in competition with each-other (Steam, D2D, Impulse, GamersGate, GoG, etc.) That's why you constantly see ridiculous sales on relatively recent games (anyone who's been paying attention recently could've easily had Bioshock, Chronicles of Riddick, Titan Quest, and any number of others for like $5 each).

DD doesn't work on consoles because consoles are a closed system. When's the last time that you saw a price drop on XBLA/PSN/WiiWare? How many four-year-old XBLA games are still at the prices that they were at back then? The answer, of course, is "I can't even remember" and "most of them," respectively. And that's only a microcosm of what you'll see when either Sony or MS (or both) inevitably decide to go full DD with a console. Enjoy paying $60 for four-year-old retail games.

Also, digitally distributed games are tied to a specific console out of necessity. When you upgrade your PC in a few years, you'll still be able to download and play all of your old Steam games. But consoles? Probably not.

Actually, I take that back: It'll almost definitely be MS that takes the plunge. Sony, by then, will have probably learned their lesson from the PSP-Go debacle.

Sorry, but Sony have special offers on various games all the time now, plus they just cut the price in half for a bunch of great PSN games for a special "Fall offer".

A thing they I were thinking to make console price lower is to don't have a optical drive. In the place they could have a flash drive reader, by 2012 36gb flash cards could be cheap enough and there wouldn't be a limitation to space since you always can use a bigger card. It can increase the manufacturing costs of each copy, but decrease the costs of the console itself, and loading times would be just pretty short.

If we want to have B/C we could buy a external optical drive for 100$, and with this drive be able to play games of PS1,PS2 and ps3.

Remember that Digital Distribution on the PC is not just competing against other DD systems. It's also competing against retail.

The same could happen on consoles. Retail is not going away anytime soon.