Next gen consoles: 3rd party economics Fight!
It is indisputable that the current console generation has been dominated, at least in terms of hardware numbers, by the Nintendo Wii. Industry analysts have gone over the "why" of the rise of the Wii many times over, but to re-iterate here, for clarity:
* The Nintendo Wii has been the lowest price console, by a significant margin, for the entire generation, and appeals directly to parents looking to buy their child(ren) a game console for this economic reason.
* Both Nintendo and 3rd party games publishers have chosen to market Wii software toward the "everyone"/"blu e ocean" demographic -- choosing to make, effectively, casual home games that appeal to parents, and licensed titles that appeal to kids through indirect marketing appeal.
* The Wii itself is designed with the casual consumer in mind, beyond affordability and software targetting: namely the controller, which resembles a commonplace TV remote control, and utilizes a simple point-and-click interface.
The Wii entered the market as its primary would-be economic competition -- the PS2 -- was finally being overshadowed by the , then new, Microsoft XBox 360 -- the PS2 actually outsold the 360 in the 360's first year of availability, worldwide, and by no small margin, either (12M PS2s, to 5M 360s). Most of these purchases were likely made by families -- late adopters, and curiously this number is surprisingly close to the number of Wii consoles sold the very next year. Both the 360 and the Sony PlayStation 3 were wildly expensive, relative to the new Wii, giving the Wii a titanic draw to its target audience. It was "new", but inexpensive. It was appealing to people who had never owned a console. It flew off the shelves.
Fast forward to this generation, and take a look at the emerging console rumors. Lets say the most repeated rumors are "true", for each console, just for the sake of argument (and because hardware rumors have a tendency to come at least partially true).
4 core PowerPC7 @ 2.0 GHz
1.5GB of unified RAM
Radeon 6670 approximate GPU
3 core PowerPC6 @ 3.2 GHz
0.5GB unified RAM
Radeon X1900 approximate GPU
Price: $249, with reasonable features, $299 with Kinect
1+7 core CellBBE @ 3.2 GHz
0.5GB partitioned RAM
Geforce 7950 GT equivalent GPU
Price: $249, with reasonable features, $299 with Move
appeal: families, late Blu-Ray adopters
Nintendo's approach is different this time around. They have a year (or so) headstart on the competition, and are going for the *enthusiast* crowd, rather than their traditional Blue Ocean, because their pricing would be aggressive at even $349.99, with their new controller included in the package.
The big issue that remains is one that most industry analysts ignore, because they don't understand multi-platform development.
The "PS4" and "X720" have been rumored to have ~4GB of RAM, which seems reasonable, given a holiday 2013 release date. These consoles will also likely have decent (not fantastic) GPUs and CPUs, and will very likely cost in the $400-$500 range upon release. The trouble with this is that this situation will replicate the current cross-platform development issue, as it stands for 3rd parties. Namely that, in the present day, one of the biggest reasons Wii ports aren't done is that the Wii has a weak CPU/GPU and less than 1/5th the memory of its competitors.
Reducing the assets and memory/CPU/GPU usage of a game to fit is hard -- even a majority of the expense of doing a port. The PSP and DS have a similar issue, and this explains why only licensed titles typically make the transition from one to the other -- there just isn't enough revenue to justify the extra expense of doing a port between radically different systems.
Nintendo has made the heinous error of, again, creating the "oddball" console -- the ONE console which costs 3rd parties extra money to port a game to. On top of that, by holidays 2013, the Wii U will no longer fit the "enthusiast" bill, and will be forced into the Wii's position of trying to appeal to the blue ocean... except this time around, it will have burned an entire year positioning itself as the "enthusiast" console, only to be replaced by machines with more than 2x the RAM, and probably 2x the CPU/GPU horsepower at the end of that year.
Unless Nintendo sells an incredible number of Wii U consoles from holidays 2012 through the end of 2013, 3rd parties will simply not want to downport their games to the oddball. Doing so makes the assets, and performance targets, for all games match the criteria of the weakest machine, because making extra assets for some consoles costs too much. Any competitor who chooses the PS4/X720 as a minimum spec target pair will be able to produce a far superior game, without the limitations of the Wii U. Call of Duty cannot afford to be replaced by Medal of Honor, etc. -- choosing to be the "crappy crossplat with the Wii U" shooter could lead to a franchise's downfall at the hands of its competition.