I predict....
Xenon releases as expected, Q4 2005 in the US, Q1 2006 in japan and Europe (february for japan, March for EU). Japan sales will be "low", because PS3 is released in March 2006. Xenon will though have time to amass some sales, MS will bite the bullit again and take the loss for every sold HW, but this time it will not be as bad as with the Xbox.
MS will finally buy Rockstar and they will make "GTA:Tokyo" and this game will actually become the best selling western game in Japan.
MS Christmas lineup will have Halo3 and GTA:Tokyo and this will kill all the competition at that time...
Nintendos revolution will sell, but mostly to the already hardcore gamers and nintendo fanboys. NIntendos marketshare has been in decline for the last 10 years and not much can be done to turn this around (unless their revolution is something that REALLY everyone wants to have).
Other problems are that IF Revolution is as innovative as Nintendo proclaims (like they always do with their games, saying that they are revolutionary but when the games comes out.. it turns out to be a water cannon only...
, then this could put Nintendo in a rather interesting situation. Third party support is weakest on Gamecube and games that sell the most on a Nintendo plattform are Nintendos own games. Why would thirdparty want to invest time and money on the "innovative" features that exist on Revolution, if the game has a BIG chance of not selling in good numbers? If the features of Revolution, cannot be duplicated on Xbox2/PS3, then I think that many thirdpartys will make games that will be able to be played on all consoles, thus sacrificing the "innovative" features of Rev and thus.. making the Rev "not so very special because the innovative feature are not used". I think NIntendo will struggle...
PS3 will continue to be the best selling console, but this time it will probably sell aprox 2x times as much as Xbox2.....
Salefigures for next gen consoles in 2010-2011 will probably be around..
PS3 - 60-70 million
Xbox2 - 35-45 million
Revolution - ~20-25 million
The question is not who will win next gen, Sony is already positioned to win thanks to userbase, PLaystation-brand and devs-support from every area.
The question is more how much MS will gain on Sony. This time, the difference will not be as huge as it is now. THis will probably make eastern devs see Xbox2 as alternative platform and will probably port more games to Xbox2 or have simultaneous releases on Xbox2/PS3, all to cover devs-cost of making games (which will be higher)
MS will benefit greatly by having the best support to devs, with all their XNA-initiative and "upcoming" stuff that makes developing games faster and more cost-efficient without sacrificing content.
Spec-wise and what you see onscreen will not be a huge difference between consoles. Graphics differences will probably be "less" than this gen. I cannot IMAGINE MS not knowing what they are doing.. of course they will be able to match with XBox2 what PS3 is showing on screen. I mean, MS has some of the biggest names in graphical research and some of the most exciting stuff are being developed in their labs around the world.
The difference will be in software, how much it costs and how fast you can make games without sacrificing content. If MS can offer a solution that is faster, cheaper but still very efficient, then they will truly have the support from developers and more games will come out (or debute) on Xbox2.
Next gen winners:
1. Sony - Thanks to great userbase, brand-name and support BUT this time the sales will decline a bit from PS2-figures
2. Microsoft - Stronger brand-name than before, better Online-service, more aggressive price-tagging, buying of some developers (securing key-franchaises).
3. Nintendo - Might be an innovative hardware, but will not have the power to attract the mainstream-market. Nintendo still fights with its "kiddie-label". Third-party support is already "weak", will be a problem with Revolution as well.
this is what I think though...