The Xbox 360, launched November 2005, and the PlayStation 3, launched November 2006, were both cutting-edge systems at their release, and both had capabilities which were unmatched by PCs of that time.

The latest expectations for what will be running the next generation of consoles indicates a very different strategy to when the Playstation 3 and xbox360 were launched. Playstation 4’ will use an AMD x86 CPU with and AMG GPU, while ‘xBox360 – 2’ will use a PowerPC CPU and an AMD GPU.

What is the Gaming Console Manufacturers Strategy here ?
With neither next-generation console likely to hit the market until 2013, the AMD GPUs will be the best part of two years old when those systems finally hit the market which implies a distinct departure from the old strategy of selling the hardware at a substantial loss to make it back on the software. It looks very much like the console makers will be looking to limit their losses on the hardware and sell the software at a lower price to maximise revenues

Keeping the hardware inexpensive is also important for another reason. Consoles aren't just used for games. Xbox LIVE Gold subscribers spend more hours per month watching streaming TV than they do playing games. This is a burgeoning market that greatly expands the appeal of games consoles as playing games is a niche activity but everybody watches TV.