I personally think the video game market can comortably survive with 2 consoles available. There is always a loser when there are 3, just have a look at the X-Boxs in Japan. But how long is a company willing to take loses until one day they say, we have had enough?
Despite numerous fans of Sony and MS think, Nintendo will never leave the market because that is their core business and they make millions of dollars profit each year. But i do think one of the other 2 may call it a day in the video game market in the future.
Both MS and Sony have lost focus on video gaming and put more into technological features. I have no problems them using the advantages they have from their core businesses but when it ends up pushing the price of a console too high (e.g $1000 for the PS3, here in Australia) then it is concerning.
I am one who grew up playing Super Mario Bros and many other games in the 8 and 16 Bit eras and while game prices even back then were steep over here, the console price was reasonable. It was all about the games and survival in the market depended on it.
Even games are now starting to cost more but some retailers fortunately refuse to pass on these prices. The fact is despite what anyone refuses to believe is that no matter the console, kids will be the end user for the most of the consoles sold.
Parents are a big group of purchasers of video games for their kids and the one thing they are is price conscious. They will also tell their kids to buy games suited to their age and titles such as Cars have benefited from this.
So the extra features of a console would be ignored by many because this notion of creating a super computer around a console is useless. The fact is most people will choose laptops over a console for a portable computer, a video game console was never designed to be a computer alternative anyway.
Therefore in the future, will the Blu ray player in the PS3 cost Sony the top position in the market? Can Microsoft convince more people in Japan to trust them and buy the X-Box 360? Will Nintendo regain the number 1 position with the Wii?
Only time will answer this but i think one will end up the big loser in this generation.