It's coming. It's on the verge of happening. Next Generation consoles are gearing up at E3 this week for a battle roy-al with cheese.
I've read some of the prelim specs and thought I'd give my 2 cents:
Xbox 360 - This is going to come out in time for Christmas this year. They have completely redesigned the architecture. They no longer use an Intel/Nvidia chip but a custom processor with an Ati graphics chip. The processor runs 3 cores all at 3.2 Ghz. Will have a HD again as well as NIC and wireless (A, B, & G). Will be at worst partially backwards compatible. Because they changed the architecture, I think the system will have to emulate an xbox. That could be bad, because it means they only will work on making the most popular games compatible.
Playstation 3- Cell processor which has 9 cores. Hard to tell if all the cores run at 3.2 Ghz or if combined they do. I can't imagine they all run that fast. The heat would be a huge issue. It is supposed to do 2 teraflops of calculations though. Will be completely compatible with playstation 1 & 2. Will also use Blu-Ray DVD technology. I'm not quite sure how I feel about this. Do the games really need that much more space? The only console that had issues with space was the game cube and that's because they had the small discs. It will be interesting to see how next gen dvds work and the cost. This could be a huge thing with the PS3. If xbox can put out games for $50 and PS3 has to charge 60 or 70 xbox is going to go a long way in catching sony.
Nintendo Revolution - really small ( about the thickness of 3 dvd cases), plays dvds and will have tons of Mario games. They are supposedly coming out with something that will be revolutionary. Only time will tell.
The main thing I think working for MS is that they have Halo 3 coming out the same day PS3 comes out. People bought the xbox because of Halo & Halo2. They will buy it for Halo 3. By then the pricing scheme of the PS3 should be clearer. If the blu-ray is cost prohibitive, xbox could indeed become the market leader..
Only time will tell