Consoles, being the closed and fixed platforms they are, have a finite life. Every five years or so, all competitors drop the existing platforms and introduce a new one, thus resetting the console life cycle.
The Xbox 360 was released in late 2005, with the Wii and PlayStation 3 coming out a year later. Microsoft made it a point to be out the gate first, but the Xbox 360 signaled the (somewhat early) start of a new generation.
2010, being the usual five years after the start of the generation, feels too soon to start all over again. Video game sales are still on the rise, and the current consoles’ prices either haven’t dropped at all (Wii) or are still considered too expensive for the masses (PS3).
All signs are pointing to this current console generation being one with a longer life bar. In fact, Ubisoft is anticipating the next generation machines sometime in 2011 or 2012.
The fact that developers are still extracting more power out of the current platform shows that there isn’t yet a demand for more headroom. Furthermore, the rising costs of producing engines and assets for a modern game would only be made even more severe on a completely new platform.
Ubisoft knows that the next generation will require even more manpower, and is already looking at possible mergers for when the time comes.
"We want to take advantage of a company that could bring more technology to us, or new brands," said CEO Yves Guillemot to GamesIndustry. "So we have now enough to help us to grow the company for not only next year but to get ready for the coming of the next generation consoles that are probably going to happen 2011, 2012.”
So between now and 2012, Microsoft will hopefully have fixed all reliability problems; Sony will have dropped the PS3 price to Xbox 360 levels; and Nintendo will have sold at least one Wii to everyone on the planet.