Over at GigaOM, Wagner James Au argues that the mammoth launch success of Grand Theft Auto IV is "the beginning of the end" for the next-gen. If a launch that universally successful can't budge hardware sales - and GTA IV really didn't - then "drastic changes" may be to come, says Au:
Expect to see games made for lower budgets, targeted at wider audiences (ones that aren't fixated on high-end 3D graphics) and delivered over broadband with a micropayment program in place. Don't expect a follow-up to the 360 or PS3 anytime soon, either. In other words, the days when so-called "next-gen" gaming reigned supreme are coming to end - instead, the industry's future will be shaped by games like Rock Band.
Au cites VGChartz data, which can be problematic for several reasons recently highlighted in an excellent Simon Carless column at GameSetWatch, but aside from that minor note, I think the future Au foresees is definitely a likely one - to an extent.
GTA IV, of course, netted $500 million in its first week. Hardware manufacturers may need to become more agile, but I highly doubt that the giants of game development will be so easily shifted to lower-budget, microtransactions-driven titles when there's money like that to be made from a hit.
Web entrepreneurs have also been forecasting, with strange virulence, the death of the "core" game industry as we know it for some years now, and they predict its recession in favor of viral, social, casual browser-based stuff. This sector is currently the darling of the venture capitalists, and many of their products have garnered the attention of millions of mainstream users, but such products have yet to prove they can hang in beyond the bubble, and remain primarily of major interest to those who invest in and cover the space. Meanwhile, the console-cycle industry model has persisted for decades.
Most likely, the crystal ball will feature a blend of both business models - a continuation of the traditional one, plus some more risk-resistant, smaller-scale products.