Up until recently, I've been amazed by just how many great first- and third party games are coming out/in development for the PS2.
Microsoft seems to have abandoned it's Xbox owners. It makes perfect sense - it is a sinking platform that will never become profitable and Microsoft needs to maximize it's installed base incentives to migrate to the 360, and a big part of that is minimizing incentives to stay put. (Few Xbox owners can be expected to shift to any other platform than the 360 at this exact point in time).
Sony's exploiting it's installed base by rolling out plenty of new titles, and it makes perfect business sense to develop games and collect royalties from a 100 million audience. Moreover, with the PS3 appearing to arrive late, it may be their only course of action.
However, there are some clouds on the horizon for Sony's current generation as well. Current-gen sales have dropped significantly since the launch of the 360. Not because a lot of people have bought it, but because customers and media have seem to have shifted their focus to the upcoming generation.
What are the consequences? Well, first of all - the 10 year life cycle that Sony time and time again claims to work towards seems more likely to end up being 7. The original Playstation lived between 1994 (december) and 2002. If the PS2 needs to survive through 2007 to meet it's predecessor.
With Moore's law still in effect, you may expect console generations to come and go faster - but shorter life cycles require shorter pay back times. Unless the console providers can invent ways to increase spending/customer/cycle, it will invariably affect console subsidies and as a result console prices.
50% of all Playstations ever sold were sold after the console hit 149 bucks. It's going to be interesting to see how long the nex-gen life cycle ends up being. If we're creeping down on five years, I think we'll be seeing the console market plateauing in terms of household penetration. There just might not be enough time to realize economies of scale for a 149 price point.
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