Not sure about Sony or Microsoft bowing out.  I think they've both invested/thrown in way too much till now to do that.  It's like a hand of poker which has gone on too long for them to just count their losses and bow out.  For as long as they are making enough profit from other branches of their operations, I think they will keep trying to make videogames profitable for them.  

I am in complete agreement with you that they have no clue what or even whom to focus on.  That may be why they're sitting it out while Nintendo play their next card.  Who knows?

I know the purpose fo the thread is to propose our own theories but I want to address the one Leo raised.

I agree that Sony, Microsoft and Nintendo are all flummoxed as to what to do.  You omited Nintendo, but if you look at the 3DS, 3DS Circle Pad Pro and 3DS is is clear that Nintendo also doesn't know their ass from their elbow at this point (vis a vis what the market wants).  Sony has their Move, Wonderbooks and Vita,  Microsoft has Kinect and seemingly no interest in building up in-house software development.

However, their collective lack of direction is not the cause for the long console cycle. First, it's the economy.  Before the GFC there was much talk about this generation being the shortest console cycle mostyly driven by Microsoft looking to iterate faster, buoyed by the success of their early launch of the 360.  Then we went into unprecedented waves of economic recession.

Another reason it was prolonged is developer pressure. No need to belabor that point.

Most importantly though, for much of this generation there has been detente and a loose agreement to multilateraly dis-arm. What prompts new consoles? New consoles.  As Iwata said in 2007;



Iwata further explains that fresh hardware is often the result of the company needing a new weapon in the fight against other consoles. With the Wii, however, he feels that the company won't be needing any new weapons for quite some time, stating "But today's situation is such that we are not desperate for any new weapons at all."

http://www.joystiq.com/2007/11/06/nintendo-rethinks-console-life-cycle/

After Sony invested so much in R&D on the PS3 (which brought on a ridiculously high price point) they needed the generation to last as long as possible.  They had the highest mountain to climb back down.  Microsoft was wanting a faster cycle to once again outmove Sony but after the GFC hit, and $1.5 billion in losses due to RROD they had the surprise success of Kinect they also somehow found themselves #1 in North America.  Their reason to move evaporated.

Also, despite the Wii being the best selling console the HD manufacturers were insulated from their success because Nintendo turned away the core audience by making a non-HD console.  So they didn't have to compete with Nintendo.

Ninendo did not have to act because their were #1 and had the rivers of gold that the DS produced. It is conceivable they could have not launched the 3DS and kept with the DS until after the next home console, but that is not how "the bridge" has worked in the past, so they stuck with the plan.

The short of it is, I dont think it is for lack of imagination or direciton that the next console cycle has not hit.

**The 3DS could be the Nintendo handheld that takes the "shortest life-cycle" record. I think it is going to go down in history as a "failed" system. Not as bad as the Virtual Boy, but Nintendo's history with 3D has not been, nor will it ever be, a good one. I think you are going to see a NON-3D, Multi-Touch, Gyroscopic, Retinal Display, Possibly Digital Download only, TABLET from them in a year and a half's time, IF they make another portable system AT ALL! The writing is on the wall already. The games that were announced day one LAST YEAR (Animal Crossing, Paper Mario, Luigi's Mansion) are STILL not out, 3rd party is paltry at best and the Virtual Console & e-shop just don't seem to be going anywhere. Iwata has already said they are downplaying 3D and Miyamoto has said the next system is being designed, as well. I don't think this thing is even going to make 5 years. I take it with me every where, but even I have to admit... not looking too good!

The economy may be stopping some developers from throwing a lot of cash into game and console development --BUT-- I don't think that's the reason for the stall. Even throughout the worst financial times, Apple is still making a SHIT-LOAD of money... Look when they released the iPad, for Pete's sake...! Portable and Pricey electronic's ARE SELLING! I think "if you build it, they will come" but no one is making a move to do so yet!

Speaking of Apple, who knows, maybe you'll see an exclusive deal for Nintendo Software on Apple portable devices and we won't even SEE portables from them after the 3DS!

Yodariquo said:

I'm going to go into this further on the next podcast, but I believe nobody knows how to design games anymore.  And I mean design.  The actual science of making the game intuitive and leading the player to fun is completely lost.  Basic, fundamental errors are rampant.  This doesn't disregard the possibility or existence of very fun games, moreso that it's the core concept succeeding enough to overlook the flaws that shouldn't exist.

Oh I disagree. I think there are plenty of extremely well designed games.  Games that if you were to strip off the pretty graphics and characters/ story they would still be successful gameplay experiences.

You can play the role of me, just read what I wrote up there. ^ and then read all the games I've beaten this year as evidence. But do it in Iga's accent, it's more convincing.

Or not, I can just imagine it and it's just as entertaining.  Maybe I'll do it next time I am on, I'll impersonate you, impersonating me, impersonating Iga.

phantom_leo said:

The economy may be stopping some developers from throwing a lot of cash into game and console development --BUT-- I don't think that's the reason for the stall. Even throughout the worst financial times, Apple is still making a SHIT-LOAD of money... Look when they released the iPad, for Pete's sake...! Portable and Pricey electronic's ARE SELLING! I think "if you build it, they will come" but no one is making a move to do so yet!

Speaking of Apple, who knows, maybe you'll see an exclusive deal for Nintendo Software on Apple portable devices and we won't even SEE portables from them after the 3DS!

Aplpe is Apple. It's a cult, much like Nintendo. They both defy all natural trends.

**The Wii U is not going to go over well with gamers, Nintendo fans and the hard-core. It'll be snatched up by Soccer-moms as Christmas Gifts for their kids who don't know any better. It will sell well, but won't do nearly as well as the DS did, or the Wii. I think gamers over the age of 25 are getting tired of Nintendo's gimmicks and are going to look elsewhere for their gaming fix. I think developers are seeing their gimmicks as being hard to work with and are NOT going to want to spend time and money on fully developing/using the controller. Miyamoto was the man with ALL the ideas and now that he is looking to retire, Nintendo doesn't have a clear direction on where to go with the technology and pretty much everything you will see put out by them will be cut and paste retreads of their previous successes. Miyamoto's ideas drove each and every system design and launch since the NES, NOT so with the Wii U... The launch line-up will be SUPER-Lacklaster due to Past-Gen ports and not enough first party offerings. It will make you WISH it was as exciting as the 3DS' launch!