If we end up in a situation where only a couple of companies can only produce a couple of games a year for these things, the market will react adversely and new opportunities will arise or consumers will go elsewhere. The market can set the bar for a sustainable quality standard at a level of supply that is satisfactory to the market.
Yes, that's already happening. It's called mobile/social/iPad gaming. Those are the new opportunities that are arising and where the consumers are going. Is that the direction you think the industry should go? Do you think super-high-end consoles will somehow abate that trend?
I'm not sure why you're assuming a level of supply that is satisfactory to the market. Gamers can demand more, bigger, louder, pixel-pushing titles more frequently every year all they want, that doesn't mean it will be feasible for the industry to produce them.
You're basically arguing for the same model as the Hollywood studios,
for which I have roughly the same amount of contempt.** When only a handful of studios all decide to chase after the same market segment and direct their attention to the same shallow, formulaic tripe at the expense of innovation and new concepts, the industry stratifies and stagnates while the money only flows to a few major players. In general, I don't see that as healthy for the industry, or for product.
To which you will say that there are loads of opportunities for low-cost, indie, niche titles on the PC, which is absolutely right. (In fact, I don't even own a console and am unlikely to buy another one as I use a PC, so this discussion is mostly academic to me anyway.) The problem, however, is that the industry is consolidating into a strict two-tier space where the graphical horsepower is becoming increasingly important at the expense of everything else, which relegates developers who can't compete on that front to the indie/XBLA scene, whereas it was previously viable for companies to try somewhat more experimental and unrefined ideas while still maintaining a respectable level of graphical fidelity and still be sold on the same shelves as the AAA blockbusters, and not immediately be written off by gamers as incompetent solely do how the game looks.
**Though, somewhat paradoxically, the root cause there is the exact opposite of the game industry's, in that Hollywood is trying to target the broadest, global audience possible and make films appealing to every culture and audience. Or at least, the male under-25ers in every culture.
We don't need hardware to artificially set that. Software competition and the market can sort that out.
Hardware always artificially imposes limitations on developers, by virtue of the fact that it's hardware and it has limitations. There's nothing inherently less artificial about the Wii's hardware than there was in the 360's 3-core, 512 MB design in 2005, when you consider that PCs had quad-core 2GB systems at the same time.
(And this is to say nothing of the physical limitations that will come up with trying to shoehorn the horsepower you want into a console-sized box).
Also, Epic/Crytek/Activision/ND/EA do have competition. They have to compete with legions of lower-cost developers selling games for a fraction of the price they're selling at on various platforms. There are new models and avenues opening up for developers who can't or don't wish to take blockbuster gambles.
Indeed. That must really suck for them.
It seems to me you're being contradictory. You can't simultaneously argue that the market will decide who wins and who loses and we should just accept that without putting any constraints on anyone, while also arguing that the console makers have an obligation to put out the most powerful, capable machine possible, cost be damned. They play in the same market as well and have an obligation to balance their desire to gain market share and sell product at a cost-effective price point with their desire to make money. If they decide to put less-than-stellar hardware in the PS4 and NextBox due to those concerns, that too will be the market at work.