"...So the PS2 will live on as a component in Sony CE products long after the computer entertainment division has introduced the PS3. With an already huge installed base, moves such as this will only help widen the demographic spread. There is a downside for Sony: For the first time, developers and publishers can probably afford to ignore the new hardware and make a good living from older hardware.
But the strategy works for Sony. In a few years, it will be able to offer a full range of computer entertainment products: a high-end PS3, the venerable PS2 in stand-alone and embedded forms, and handheld and toy-form PS1s.
Nintendo, which has relied on each new hardware being a whole new product with little backward compatibility, must take stock of its strategy. Microsoft might have to consider that the already high-powered Xbox could be a better bet in the medium term than an even-more-powerful Xbox 2."
Sony's expertise in consumer electronics has established them as quite the formidable foe, and Microsoft with its multi-billion dollar bankroll at its disposal will not soon concede without a fierce battle. It is Nintendo that I fear for the most with it's relative naivety when compared to the others. While I believe Nintendo knows game play better than any other player in the games industry, it will be Sony's hardware prowess and Microsoft's money that brings Nintendo down in the long run. Please prove me wrong.