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http://www.businessinsider.com/why-theres-no-wii-2-xbox-720-or-ps4-on-the-horizon-2009-6

Why There's No Wii 2, Xbox 720, Or PS4 On The Horizon
Sachin Agarwal |Jun. 1, 2009, 11:40 AM


The theme of this year's E3 gaming expo is that publishers and developers finally know how to harness the power of the three big consoles -- Nintendo's Wii, Microsoft's Xbox 360, and Sony's PS3 -- and the upcoming slate of games will be the most technically ambitious, polished video games ever. Of course, just as everyone's getting comfortable with the consoles of the current generation, next generation consoles are right around the corner.

Colin Sebastian of Lazard Capital Markets says "both Sony and Microsoft have new platforms in development." So it's a done deal, right?

It's a classic game theory problem called a prisoner's dilemma: Everyone's better off by keeping the current generation going as long as possible, but one company can try to stake out a strategic advantage by moving first. However, for the first time in gaming's modern era (after the Atari crash), there appears to be no driving force for any of the "prisoners" to push forward to the next generation of video game consoles any time soon.

It is in the interest of all three console makers -- Nintendo, Sony, and Microsoft -- to keep this generation going as long as possible. Nintendo's (NTDOY) printing money, Microsoft (MSFT) has worked out their manufacturing issues, and Sony's (SNE) finally been able to reduce costs on the PlayStation 3 where they're finally not taking a massive bath on every console sold.

Traditionally, the last-place finisher in a particular console generation aims to be the first out of the gate in the next one. However, there's no major reason for Sony to try to move the goalposts on Microsoft and Nintendo. Unlike the jump from the PS one (compact discs) to the PlayStation 2 (DVDs) and the jump from the PS2 to the PlayStation 3 (Blu-ray), there is no new larger storage medium to jump to. Sony's thinking was that the inclusion of Blu-ray in the PS3 would allow Sony to hold off Microsoft's 360, just as the PS2's DVD player helped depress demand for Sega's Dreamcast, which sported a GD-ROM (essentially, a higher capacity compact disc) drive.

For the PlayStation 3, built-in Blu-ray and hard drives in all models still remain significant differentiators. Microsoft tried to counter the PS3's Blu-ray with a software-powered external HD-DVD drive and the lack of a hard drive on all 360 models continues to result in developer grumbling. The PS3 has no problem pushing 1080p visuals at a smooth 60 frames a second -- the standard for the best HDTVs. Manufacturing costs will only continue to fall, and Sony maintains its advantage in technical specs. A new console generation increases development and manufacturing costs, and developers would have to learn to code for a new platform -- the issue that resulted in many third party Xbox 360 exclusives in the PS3's formative years. Sony doesn't want to end up in that situation again.

However, Microsoft looks to be in no hurry to introduce a new console that has Blu-ray, and why would they? The 360 has managed to outsell the PS3 worldwide without it, despite Microsoft's failure to penetrate the Japanese market in any meaningful way. The fees from Xbox Live Gold subscriptions are a significant, and high margin, recurring revenue stream, and would be in jeopardy in the move to a new console generation.

Nintendo has taken a different path with the Wii: They've ceded technical superiority to the other guys and went for a user-experience superiority. They blazed a new path with the DS's touch controls and chose to continue to cede technical superiority for a new user experience and a broad effort to go after the "blue ocean" by bringing non-gamers into the fold. But there's no guarantee that these new Wii owners would upgrade to a new platform; Nintendo may have to re-sell these new gamers and if HD graphics didn't matter the first time, why would they matter the second?

According to Lazard's Sebastian, even though both Sony and Microsoft have spent some development dollars on next-generation consoles, "neither one is enthusiastic about launching a new platform." Nintendo has already talked about "refreshing" the Wii, specifically speaking about high definition and online services, characterized by Sebastian as a kind of "Wii plus." Sebastian says that the "natural lives of the consoles would be through 2012 or 2013." That would be a seven-year console cycle, which would be the longest in history.

Now, one company may still try to sell out the other two prisoners and kick off a new console generation for their own benefit. Nintendo might decide it has to press its advantage now, as demand no longer outstrips supply for the Wii and they feel that they can continue to use their goodwill to make new inroads into casual and family gaming. Perhaps real gesture control -- controllers with motion sensors, like the Wii's -- for Microsoft and Sony can't come on the current 360 and PS3 platforms and would require new processing hardware. Someone may see the potential dollar signs and decide to commit to digital distribution and cut out the retailer channels to control the pipe to the box.

But game theory analysis of everyone's incentives says this game ain't over yet, not by a longshot.

 

[brain_stew]

There's huge incentive for Sony to force a new generation and I fully expect them to do so in 2011 or 2012. The PS3 is a lost cause at this point in terms of gaining market share and making up for its losses.

 

[Ranger X]

Interesting article. There's some funny parts but all in all, the point is true: Next-gen = not anytime soon, as it should.

.

 

[1-D_FTW]

There's huge incentive for Sony to force a new generation and I fully expect them to do so in 2011 or 2012. The PS3 is a lost cause at this point in terms of gaining market share and making up for its losses.

And a two PS3s duct taped together approach would make sense. Assuming they could reboot it with a compelling theme like Wii was able to do. But Sony won't be looking to start some new uber generation any time quickly. They've lost too much money this generation to be excited about starting that process over anytime soon.

 

[whitehawk]

Yup. I'm hoping for a new console in 2011 or 2012. Perhaps even later, but I'd say 7 years is good enough.

 

[AgentOtaku]

fuck yes ....seriously, for the first time in my gaming life, I DO NOT want to hear about new consoles for a long time

 

[Hours Left]

I DO NOT want to hear about new consoles for a long time

This.

 

[Strike]

fuck yes ....seriously, for the first time in my gaming life, I DO NOT want to hear about new consoles for a long time

Seconded. I'm just getting into the current one.

 

[bdouble]

There's huge incentive for Sony to force a new generation and I fully expect them to do so in 2011 or 2012. The PS3 is a lost cause at this point in terms of gaining market share and making up for its losses.

So lose more to make up for the loses you already have? Maybe if the economy was in great shape and we had some expendable income but it doesn't make sense looking at the bigger picture.

 

[mr stroke]

fuck yes ....seriously, for the first time in my gaming life, I DO NOT want to hear about new consoles for a long time

You won't be saying that in 2011

 

[duk]

I don't want any new console until 2012 actually... continue to mature the s/w and update the h/w is fine for now

 

[nli10]

New Platform no longer equals new more powerful hardware.

The article misses the point.

Natal is a new Platform, WiiPlus is a new platform, PSP with no disk drive is a new platform etc...

 

[warthog]

fuck yes ....seriously, for the first time in my gaming life, I DO NOT want to hear about new consoles for a long time

This.

 

[Ranger X]

You won't be saying that in 2011

What do you need a new console for? Just to own something new? Graphics and games are starting to hit a real comfort zone this gen. I really think most people won't get tired anytime soon. Me included. I don't need Pixar graphics now or anytime soon.

.

 

[Cow Mengde]

This generation barely felt like it started.

 

[camineet]

I'm still certain we will see the next generation of consoles in fall 2011 or fall 2012. Maybe one of them won't arrive until 2013, but overall, between 2011 and 2013 is when the next generation will start.

6-8 years between generations is longer than the 4-6 of usual.

 

[Reallink]

New Platform no longer equals new more powerful hardware.

The article misses the point.

Natal is a new Platform, WiiPlus is a new platform, PSP with no disk drive is a new platform etc...

You won't be saying that in 2011.

 

[squicken]

I stopped reading at 1080p@60fps

 

[avaya]

2011 is perfect for announcement and late 2011 perfect for launch, it would make it 6years since E3 2005. The world will be in another expansionary stage. New costs this time around would not revolve around fabs for Sony so the only charges will be relatively small R&D. These would be capitalised at the very bottom of the cycle which will be 2010, makes things even better.

Sony needs to be out of the gate as fast as possible and they will only dig themselves a greater whole if they continue to scale back projects since the ramifications of doing exactly that have haunted them all through this decade across their whole business.

In any case they won't be worrying for too long about the company having enough resources or cash, Sony and Panasonic are destined to end up together to compete with Samsung.

 

[Log4Girlz]

If anyone decides to escape first it will be microsoft again. I think that 2011 the time will be right to release a new console. Having said that, well the longer everyone waits the more powerful hardware we will get, so I wouldn't mind waiting a few years more.

 

[Mr.Potato Head]

And a two PS3s duct taped together approach would make sense. Assuming they could reboot it with a compelling theme like Wii was able to do. But Sony won't be looking to start some new uber generation any time quickly. They've lost too much money this generation to be excited about starting that process over anytime soon.

We are talking about sony here, dont get it twisted...they love powerful systems

 

[Anerythristic]

With them announcing console MMOs in force , IMO we have a 3yr. wait.

 

[Ignatz Mouse]

It *was* Future Proof!

 

[AppleBlade]

Though I know it's not likely but I wouldn't mind getting a new Wii soon with motion-plus built-in to the wii-mote, standard hard-drive, and HD graphics on par with the 360 & PS3.

The other systems can wait a while I think, in particular the PS3 which already has a standard hard-drive, built-in wifi, and blu-ray.

 

[Marvie_3]

fuck yes ....seriously, for the first time in my gaming life, I DO NOT want to hear about new consoles for a long time

Same here. There's still so much that can be done this gen. No need for new systems yet.

 

[Log4Girlz]

We are talking about sony here, dont get it twisted...they love powerful systems

Well, Ken Kutaragi is no longer working for them.

 

[BorkBork]

There's huge incentive for Sony to force a new generation and I fully expect them to do so in 2011 or 2012. The PS3 is a lost cause at this point in terms of gaining market share and making up for its losses.

Yeah, the company with the biggest cash problems is going to be the first to gamble and sink all their resources into major R&D and another costly launch.

COME ON!

 

[RubberJohnny]

There's this thing called a Recession, you might have heard of it. Kind of a big disincentive for new hardware releases.

 

[speedpop]

I'm glad that those of you expecting new consoles soon are not in any position to have a ruling effect on game companies.

 

[Owzers]

This generation barely felt like it started.

This this this. Mainly since Xbox 360 started with last-gen ports in HD, PS3 started with it's worst first party titles, and Wii started with a motion controller that everyone expected more from.

 

[SouthernDragon]

As a consumer/gamer, I am more than happy to hear about 7 year life cycles. Honestly, it feels like developers are just starting to get a good handle on the hardware and each platform's strengths.

 

[brain_stew]

Yeah, the company with the biggest cash problems is going to be the first to gamble and sink all their resources into major R&D and another costly launch.

COME ON!

No need for costly R & D tbh, they just need a Wii like upgrad, a beefier Cell chip, more RAM and an upgraded Nvidia chip. Couple that with a more focused hardware design, with cost savings at the forefront and a "base" model without the bling available from launch and you have a very affordable console from which you can start breaking even or turning a profit on from launch.

 

[SkySonata]

I'm glad that those of you expecting new consoles soon are not in any position to have a ruling effect on game companies.

Don't need to have a ruling effect. Game companies know better without anyone telling them to. The article has one major flaw, and this flaw is what undermines anything it predicts.

And that flaw is...... they are not taking the PC market into account. The next big leap in graphics cards are not that far away, neither is Direct X11. Consoles will look very dated by 2011, if not Q2 2010. Not even the Wii can last that long, as Microsoft has completely 1-upped it: better graphics with even better game control.

Shots have been fired. Get ready for new consoles in a few years, whether you like it or not.

 

[teh_pwn]

And a two PS3s duct taped together approach would make sense. Assuming they could reboot it with a compelling theme like Wii was able to do. But Sony won't be looking to start some new uber generation any time quickly. They've lost too much money this generation to be excited about starting that process over anytime soon.

By 2011, Sony/Microsoft/Nintendo could each make a machine up to 100x more powerful than PS3. Most likely Sony is going to change strategies and focus on best performance for the money. If they could beat Nintendo/Microsoft by over a year by releasing a system only 10x faster, but selling it at $200 while making a profit, then Sony would have every incentive to do it. To shareholders, they see nothing wrong with increasing profit margins while potentially recapturing a market that could increase future profitability.

 

[Chittagong]

This generation has introduced so many things, that's why they're off the hook for now.

I mean, who thought at the eve of the Xenon announcement that in a few years down the road we'd have

- Downloadable bytesize games
- Downloadable classic games
- Downloadable full games
- Downloadable episodic content
- Downloadable and Streaming 1080P HD movies (hell, 360 couldn't even do 1080P)
- Access to your media on your computer / home network
- Community created games
- 3D avatars integrated into games
- Minority report style motion controls
- Integration with social networks
- Integration with internet music
- A completely revamped interface

The amount of functionality the players have added to their consoles is truly mind boggling. Never before has a console changed so much.

I was almost ready to call the peaking of Xbox as games such as Halo ODST, FF13, GTA TBoGT and MW2 break very little new ground gameplay wise....

... but the new motion controls will give them another 2-3 years of innovation. Rare created casual games, a new Epic game, tons of Arcade content.

Xbox 360 Slim + Motion Control with Rare casual games, Facebook + Twitter + Last.fm + Sky/Netflix will push that boost.

 

[Nizz]

fuck yes ....seriously, for the first time in my gaming life, I DO NOT want to hear about new consoles for a long time

I'm with you, man. Definitely. There's stuff coming out recently that looks fantastic on both HD consoles. I'm in no rush to jump into next-gen yet.

 

[jmdajr]

fuck yes ....seriously, for the first time in my gaming life, I DO NOT want to hear about new consoles for a long time

AMEN BROTHA!

advance the fucking software!

 

[BorkBork]

No need for costly R & D tbh, they just need a Wii like upgrad, a beefier Cell chip, more RAM and an upgraded Nvidia chip. Couple that with a more focused hardware design, with cost savings at the forefront and a "base" model without the bling available from launch and you have a very affordable console from which you can start breaking even or turning a profit on from launch.

Then there's no incentive for them to launch a new console. By your timeline, Sony should be profitable with the PS3, and it will still be a very competent machine. Developers will have the time and the resources to maximize the console's potential instead of figuring out a new machine. Marketshare is meaningless, as Sony as a company will have to focus on profitability to survive, at least in the short term.

 

[Taurus]

Yeah, the company with the biggest cash problems is going to be the first to gamble and sink all their resources into major R&D and another costly launch.

COME ON!

It doesn't work that way. It really doesn't.

 

[DeaconKnowledge]

There's huge incentive for Sony to force a new generation and I fully expect them to do so in 2011 or 2012. The PS3 is a lost cause at this point in terms of gaining market share and making up for its losses.

brain_stew nailed it.

 

[Raistlin]

he PS3 has no problem pushing 1080p visuals at a smooth 60 frames a second -- the standard for the best HDTVs.

oh really ...

Spoiler

no

 

[Raistlin]

There's huge incentive for Sony to force a new generation and I fully expect them to do so in 2011 or 2012. The PS3 is a lost cause at this point in terms of gaining market share and making up for its losses.

The former is quite likely true, the latter ... patently false.

 

[Prince of Space]

fuck yes ....seriously, for the first time in my gaming life, I DO NOT want to hear about new consoles for a long time

This x 1000.

 

[kevm3]

I don't know why this generation seemed to move so much faster than the other ones. These systems have been out for a few years, but it doesn't seem like it. Really, there's no need to move to a new system because, as has been said, there's a recession, so consumers aren't likely to be willing to buy a new and expensive system. Secondly, videogame budgets are more limiting than the technology for the most part, so requiring developers to make even more complex and expensive assets is just asking for trouble.

 

[Ironballs]

fuck yes ....seriously, for the first time in my gaming life, I DO NOT want to hear about new consoles for a long time

Cannot agree more.

Just give me WiiHD next year and I'll be totally content.

The longer this generation lasts, the happier I'll be with my decision to be an early adopter this gen.

 

[Chrange]

The PS3 has no problem pushing 1080p visuals at a smooth 60 frames a second...

When do those games come out?

 

[Flying_Phoenix]

I don't know where to go with my opinion on a next generation.

On one side this generation has felt like it just started and it has so much potential left.

On the other the consoles right now could use some huge improvements to become well rounded.

Wii = A bit more power under the hood (I.E. Taito Type X2) so the graphics can be smoothed out a bit more and it can handle a satisfactory amount of enemies on the screen, scaling, and physics, HD support, SD Cards come stanadard with Wii's, and a decent online system.


Xbox 360/ PS3 = More RAM, and be a bit more powerful enought o make 1080p as well as 60FPS be much more common.

 

[lunarworks]

All I'd like to see is a upgraded Wii that plays regular Wii games in HD. They don't need a new platform, just a bit more power to give a higher resolution. Wii HD exclusive games don't need to exist either, since it's just resolution we're talking about.

 

[CounterSeal]

I still have many friends who just recently joined this "gen" through getting a PS3/360/Wii, so I'm one of the many that feel there's no need for a new generation of consoles anytime soon. That 10 year life cycle that Sony's been touting for the PS3 is looking more and more feasible.

 

[brain_stew]

The former is quite likely true, the latter ... patently false.

You really see them making up that $4/$5 billion hole and coming anywhere other than third place with the PS3, really?

They've got a lot to gain by starting afresh, just concentrate on profitability for the PS3 from here on out, bleeding even more money for insignificant marketshare gains is just a terrible policy at this point.

Concentrate on nailing the PS4 as a product that can deliver profits and marketshare from day 1. The PS3 is a failed product, just cut your losses before it brings down the whole damn gaming division. The slim is a start, but don't go taking a hit on that thing, use the cost saving to make a little profit on the hardware.