Which companies will rise, and which will fall?
None of them fall, but all three of them retool the ways in which they communicate with the consumer and how they sell hardware. Nintendo will continue to be the odd man out in terms of hardware with Sony, MS and the PC dominating multiplatform gaming.
Microsoft>Sony>Nintendo
In terms of sales, but none of them pass the 75 million mark and Nintendo's thinner margins coupled with lower software sales across the board make it a hollow victory. Sales are extremely close together at this point with no one having a clear sales advantage.The Wii U once again fizzles out after 3 years and remains a zombie until year five when rumors of a new Nintendo console arise. MS and Sony once again plant their feet firmly for a slightly longer generation, but their new next next consoles are shown at their sixth E3 in order to avoid the rise of big alternative offerings like iOS/mobile/facebook that cemented themselves as the PS3/360 became stale.
Nintendo
From the most recent E3, where are each of the companies going? Who are their respective markets? Their usual targets which includes core Nintendo fans, Wii "casuals" that left for iOS, mobile phones, etc. They say they want "core" gamers that more or less funded 360/PS3 development after the Wii fizzled out, but they never really follow through since their software offerings lack the range and expertise for those particular types of games(action, FPS, TPS, etc.). Third parties remain skeptical of the Wii U even after Zombie U becomes a small success. Only third parties like Ubisoft and mid/high tier Japanese devs see major success on the Wii U thanks to Japanese markets and early(Zombie U and it's sequel) attempts at releasing software for the Wii U audience.
What went wrong this generation, will they address the lessons learned? They attracted a gigantic userbase, but didn't prepare the Wii for the long haul at all. This resulted in few multiplatform games and a cripped online infrastructure. They'll somewhat address the problem of online infrastructure, but the hardware will once again put them in an awkward spot once the 720/PS4/Steambox arrives. Hardcores in particular flock towards other platforms due to the weak hardware and Nintendo's insistence on keeping all their software secret until 3-4 months before release. The 3DS will continue to steamroll the Vita, but it won't attain numbers like those of the DS.
How will developing trends like iOS, Android and Facebook games affect the big three? Nintendo will find it's handheld market squeezed by these three, but not to the extent that they will need to bow out of handhelds. They'll have enough room for price cuts down the road which will help keep the 3DS competitive, but software sales will suffer slightly. They'll find themselves in an awkward spot when their evergreen titles(MK, NSMB, etc.) fail to sell as well as those on the original DS. Many people overseas and in Japan will continue to flock towards new markets since the Wii U's tablet won't offer enough to truly interest people like the Wii-mote did. The Wii U is the one major home console stuck in an awkward spot between current gen, next gen and mobile technology that quickly approaches Nintendo's efforts graphically.
How much money does each company have to risk? Have they proven to be adaptable to quickly changing markets, or are they stuck in their old ways? Nintendo has proven to be very careful in it's expenditure, but it results in hardware that is quickly left in the dust. The UI and online infrastructure is flexible enough to handle many expansions and upgrades, but it still lags greatly behind just about all other networks ranging from Apple to Microsoft's offerings.
What rumours are circulating, and which of them seem likely? Rumors of a new Donkey Kong game, some outsourced Star Fox and another safe Animal crossing. Their boldest changes come in Zelda when Nintendo allows closer development with Retro. Mario Kart releases with a wide range of online options making it the standout online racer on the Wii U. MK8 sells a ton of copies.
Microsoft
From the most recent E3, where are each of the companies going? Who are their respective markets? Microsoft continues to push multimedia functionality at the expense of gaming. They pretend to still be all about the "hardcore" gamer, but they really use the 720 as a front for W8 and casual Kinect+ offerings.
What went wrong this generation, will they address the lessons learned? Their first party efforts are paltry compared to those of their competition and their first generation 360 models were a joke. The XBL subscription service also discouraged many people from buying into the Xbox 360. They continue to rely on third parties to push their hardware and they continue to charge for XBL. Their hardware quality is improved immensely in order to dispel consumer anxiety from launch period onwards. They don't really learn to develop more first party games outside of more well known titles(Forza, Halo, etc.) and some exclusive third party games that eventually become open to other systems. The 720 is still a powerful machine that continues down the path set by the 360.
How will developing trends like iOS, Android and Facebook games affect the big three? Microsoft sees a hit, but not as much as Sony or Nintendo. Their goal is mostly related to being the center of the living room with W8, not handheld gaming or gaming in general. Their biggest problems lie in making people buy into the XBL service and the W8 platform which both happen to be unpopular. They feel more pressure from Sony and Steam than anyone else, but they are far past the beginning(OG Xbox) phase of taking over the living room and continue to push forward with contract Xbox/XBL offerings.
How much money does each company have to risk? Have they proven to be adaptable to quickly changing markets, or are they stuck in their old ways? Microsoft is more fiscally restrained than in the two previous generations, but still have more money to throw around than Sony or Nintendo. Microsoft firmly plants itself in preparation for a war of attrition much like they were with the original Xbox. Their main goal is to push their OS into the living room which does leave them vulnerable and somewhat inflexible. They still push forward with sales similar to those of the 360, but not as high as those of Nintendo or Sony. This is only the middle of their plan to take the living room.
What rumours are circulating, and which of them seem likely? Multi year contract for XBL services in order to lock their users in for a longer time, Halo 5 and they experiment with some F2P games that are locked behind the XBL paywall at no cost beyond XBL(free software locked behind closed doors). Rumors about console streaming technology float around as Halo 5 is teased. We see more contract based hardware as Microsoft attempts to lock users in with deceptively cheap 2+ year offerings.
Sony
From the most recent E3, where are each of the companies going? Who are their respective markets? Sony continues to push hardcore gaming as their major focus along with lukewarm attempts at grabbing casual audiences. They eventually scale back their handheld development in the US and the Vita becomes a Europe/Asia handheld.
What went wrong this generation, will they address the lessons learned? They become arrogant and didn't consider third parties or their consumers when they developed the PS3. They also blundered greatly in their network security, pricing strategies and the allocation of resources for software/hardware. Their biggest rule for the new generation is to develop hardware and software with reasonable budgets and shorter dev time. Their PS4 is certainly a beastly machine packing 3GB of RAM and a very powerful graphics card, but it's overall price is $400-$300 with the cheapest model containing only 120GB. Their SEN is greatly improved compared to PSN by better chat functions, UI, messaging services and the expansion of PSN+ offers at a lower price than XBL. Online multiplayer and crossgame groupchat stay free for all users.
How will developing trends like iOS, Android and Facebook games affect the big three? Their home console sector is not greatly damaged by the development of these alternative offerings, but this pressure paired with Nintendo's handheld forces Sony to slowly phase the Vita out of the Western hemisphere and into an Euro/Asia handheld. Sony no longer banks on the high tech approach for handhelds and opts for cheaper sub $180 handheld releases with better BC and an improved digital storefront paired with scaled back cinematic games. No more insanely priced proprietary hardware or $40+ Vita games from them.
How much money does each company have to risk? Have they proven to be adaptable to quickly changing markets, or are they stuck in their old ways? Sony has the least money compared to Nintendo or Microsoft and acts accordingly. Exotic hardware and long term game development are a thing of the past with them. They no longer fund half decade long projects(LOL@Last Guardian) and focus more on their studios that can release games yearly or every two years. We continue to see many small artsy type games as Sony SEN exclusives. Sony attempts to push their Japanese devs in this direction as a way to release these smaller Japanese efforts worldwide through SEN even though the Vita is no longer sold in the US.
What rumours are circulating, and which of them seem likely? Rumors about a cheaper Sony handheld designed around multimedia and handheld(not mini console) gaming circulate. We also hear rumors about a new Sony controller to replace the dualshock. Many people believe Sony will attempt to push forward with a redesigned MOVE and hardcore controller in the same box. We also hear rumors of an Uncharted 4 by Naughty Dog that surpasses nearly any game before it graphically.