Speaking at CES, Chief Product Officer Nanea Reeves of cloud gaming service Gaikai said, "Not all of the current console makers will have one more generation. That will be the big news at E3." With the Wii U confirmed for launch in 2012, that leaves either the PS3 or Xbox 360's potential successor as Reeves' subject. Of course, this is all provided the statement from Reeves is anything more than speculation. Both Gaikai and competitor OnLive have had reason to doubt traditional console gaming, as the likes of the PS3, Wii, and Xbox 360 are seen as even larger compeitors to today's streaming services.

That said, Sony is a company in a genuinely poor position for launching another console right now. Console launches can call for massive up-front investments in R&D and manufacturing that often aren't recouped until a few years into the new system's lifespan. Sony also has little incentive to make another play for the console market, which in Sony's native Japan is dwarfed by an extremely lucrative portable market where the PlayStation Portable is a strong competitor (though the jury is still out on the Vita's launch numbers across in Japan).

IndustryGamers speculates that Gaikai's statement may hint at a Gaikai cloud-based partnership with one of the console manufacturers in the next generation, another situation where Sony would have the most to gain. A partnership with browser-based Gaikai could let Sony continue competing in next gen game development without actually having to invest in new hardware. Sony's already demonstrated a willingness to support PC-like features and services, most notably the Steam integration that was native to the PS3 version of Portal 2.

SOURCE: Sony Or Microsoft to Bow Out of Next-Gen Console Race, Predicts Gaikai [IndustryGamers]