This article is a good read.

I don't think Sony and Microsoft are even competing with Nintendo anymore. I think the Wii is of its own genre of console, rather like handhelds are. If Sony drop, then it's just Microsoft in the "serious" console division - assuming Nintendo don't switch back, and they really have no reason to - and while it'd be nice to be able to have more games availiable, a Microsoft monopoly isn't a great thing for consumers at all.

If Sony stay in, though, I'm not entirely sure if they can beat Microsoft in the next generation. The thing that holds the 360 back at the moment is everybody is terrified of its reliability problems. I mean, I can say "RROD" and you all know what I mean by it. You can bet your bottom dollar that the next Xbox will have its reliability greatly improved in order to avoid another PR disaster. If they smurf up again (although for the record, my 360 is 18 months old and has had no problems whatsoever, touch wood) then they're all but finished in the generation after next, and they know it. I think without the RROD, the PS3 would be all but dead in the water, and so if I am correct and the next Xbox isn't as error-prone, yeah, the PS4 (or whatever) is going to have its work cut out to reclaim the #1 spot. It'll be exciting to see what they do to get back on top.