New generation of home consoles due 2012

Following comments made at Game Convention in Leipzig last week by Crytek's Cevat Yerli, industry analyst Colin Sebastian has said that the general consensus amongst industry professionals is that a new generation of home consoles will arrive on the market in 2011 or 2012.

Sebastian pointed to cheaper manufacturing costs for the Xbox 360, which may prompt another price cut for the console shortly. He also suggested Nintendo may soon offer an upgraded Wii console, with new technical features.

"One of the increasingly popular discussions in the industry is when to expect launches of a new generation of videogame consoles," wrote Sebastian in his latest note to investors.

"At this point, we believe the consensus opinion among industry professionals is that the next significant hardware refresh is unlikely to occur before 2011, and more likely in 2012.

"One possible exception to console timing may be Nintendo, which could opt to upgrade the Wii with faster processing power, DVD capability, and/or greater storage," he offered.

John Carmack of id Software also recently suggested that the one-upmanship of hardware manufacturers could shorten the lifecycle of the current generation of consoles, as companies seek first-mover advantage over their rivals.

"I think it's going to be far too tempting to one-up your competitor because they don't think you're doing this but you really are to get it out earlier and try and get some first-mover advantage," he said.