As has been mentioned, this generation of consoles has been incredibly expensive. Microsoft already announced a 10 year plan for the 360, and Sony has already said the same thing for their PS3.
I wouldn’t count a a true next gen console coming out until 2012 at the earliest. Before then what we might see is upgrades to the existing hardware. Slim profiles, more modern (and smaller) manufacturing processes for the GPU and CPU’s, which will make for more reliable and cooler running hardware. But it’ll still be the same basic hardware, performance wise.
And forget about OnLive for the foreseeable future. Even ignoring the incredible technical hurdles of getting HD video to a significant number of homes in a real world situation, who’s going to pay for the enormous server farms required to render games for millions of players?
Prices have already dropped on the Xbox, you can get a refurb Arcade as low as $150 if you look around. Sony is coming to grips with their strategic decisions of the past, but it hasn’t extended to PS3 pricing yet. They just announced a new portable game system that forgoes UMD and memory stick for SD storage, and there are leaked pictures of box art for a slim PS3.
I’ve got two Xboxes, a 360, an Apple TV and a Wii and was DESPERATELY looking for an excuse to buy a PS3 last time I had a little discretionary income…funny thing was, BluRay wasn’t enough of an incentive to take the leap. I’m not sure a $200 PS3 would be either.
Isn’t Sony still losing money on each PS3 sold? I mean, It is like the ink cartridges. Sell hardware for cheap, mark up the “software”.
Anyway, I’m not to sure is PS3 is going to see a price drop anytime soon. E3 came and went. No price drop was mentioned. It would have been the perfect time to do it, especially sense the PSP GO was leaked. But, also, it was implied more in what Sony said, that what the didn’t say.
As usual, Sony bumbled their PS3 Press Conference (IMHO) and dropped the ball. They let it out that PS TWO has a 10 year life span… and then, in typical Sony fashion, it took that back immediately, with “But we have no intention to stop with PS TWO there, as long as there is a demand, we will make games.”
They also stated that PS TWO was going to have 1000 new games this year. That everyone would have a game on PS TWO.
They aren’t about to cut the price on PS3 with Two still around.
They apparently want to steal from Wii, as Wii is making new gamers, PS TWO can steal them. - The PS TWO is being handed a carved out purpose against the Wii.
Also, keep in mind Sony has the Blu Ray player in it, in box. That has to take up at least 100 dollars. I’m not saying the price is justified, because I don’t think it is, but, the Blu Ray player is also in the box.
That would be another interesting thing to chart, but someone else will have to take the ball for that one. Usually with the release of a new console though, the last generation drops in price pretty quick - becoming virtually obsolete within about 6 months and only of interest to nostalgic collectors and the poor/ultra thrifty.
The big skew with that graph THIS generation is that the 360’s had some pretty serious QA problems. More consoled returned, refurbed and resold at a cheaper price might be higher than expected.
I suspect the next “new” system will be an an add-on of some sort for the Wii. By the time the three current systems are halfway through their lifespans, Nintendo will be able to add the equivalent of a PS3’s processing and graphical capabilities to the Wii for ~$200 (since processing power gets cheaper over time).
Something along the lines of the Sega 32X, or the N64 memory expansion cartridge.
As far as the 10-year lifespan thing goes, I didn’t even buy a PS2 until January 2008 - I went looking for a Wii, and couldn’t find one, and figured that eight years’ worth of million-selling games would probably tide me over for three or four years.
I would imagine that the idea is that the money consumers pay for the thing they put in their home is mostly actually paying for the hardware at the server farm, and that they can get away with charging less since not everyone is using the system at once, but the processors at the server farm can be running close to 24/7.
I’d argue there was a 1982 generation as well. There was a flurry of pre-crash consoles that vanished when the crash occurred and were replaced by Japanese imports.
Colecovision, Vectrex, and the Atari 5200 all hit the market in 1982 and the Intellivision II followed in 1983. Those were major upgrades, not one-off releases like you occasionally find and they were all released in a clump. Just because the generation was a failure doesn’t mean it didn’t exist.
I know you pulled your list from Wikipedia rather than running through them yourself but if you’re missing a data point.
How long parallel development goes on after the new platform is released is an interesting thing. Usually there’s about two years of winding down the old platform while shifting people to the new but there are exceptions. There’s a function of how popular the old system was; Gamecube development was already effectively stopped when the Wii came around and it only got a few more releases. There’s also a user adoption factor; using my own example the Atari 2600 continued to have releases until 1988 which meant development continued for two more generations. I suspect the PS2 might have a similar situation and continue low key development for the foreseeable future.
Intellivision II wasn’t a major upgrade any more than the PSone was to the PSX. It was just a new form factor for the old system, so it really doesn’t belong in your list.
Usually with the release of a new console though, the last generation drops in price pretty quick - becoming virtually obsolete within about 6 months and only of interest to nostalgic collectors and the poor/ultra thrifty. 
