Analyst Billy Pidgeon with IDC tells Next Generation that in the wake of the Wii's success and the explosion of casual, community gaming, the PlayStation 3 could be the last of the state-of-the-art consoles.

At launch, researchers estimated that Sony lost around $240 per 60GB PS3 sold. A pricey Blu-ray drive, state-of-the-art GPU and multicore Cell processor drove costs to new heights. Xbox 360's per-unit loss wasn't much better at launch at around $125 per console, according to estimates.

And then the Wii, with its cheap "GameCube 1.5" technology came along, albeit with motion sensing, showing that Nintendo could sell a console at no loss, attract a massive following and be profitable from the start.

"I think the results of this cycle will have a strong influence on the next cycle, in that cheaper consoles will be expected," Pidgeon says, alluding to the success of the $250 Wii. "Microsoft and Sony will attain successful business on this generation, but catering to the early adopter hardcore gamers with a technology leader strategy will be difficult in 2011.

"...Third party publishers are already looking for ubiquitous platforms to reach the market increase achieved by Nintendo and Guitar Hero," Pidgeon says. "The platforms of the next cycle may not be a console at all, but software distributed by network to convergent devices like PCs, set top boxes and smart phones."

He adds, "I would have dismissed this idea as unachievable last cycle when only Xbox could provide a promising connected console experience, but it is entirely possible that the PS3 is the last bleeding edge console hardware we will see."

Courtesy of Next Generation.

Mar 26, 2008