The family tree of video game consoles have branched in and branched out over seven generations, and this current generation comprised of the PlayStation 3, the Xbox 360, and the Wii, is arguably the most heated arena of video game competition yet.

Currently, we're only a brief period into the life cycles of this gen. Both the Wii and the PS3 haven't even reached their second year out. We've seen some great games released for all three, Grand Theft Auto IV (Xbox 360, PS3) and Super Smash Bros. Brawl, to name some prime examples. Given that, is it already time to look for a new console in the market?

I don't think so, but then I'm not an analyst. John Stevenson, analyst for Shore Capital, believes that the video game market - in the UK, at least - will reach its zenith this year, and that if we don't see a new console arrive, the market can only decrease in the years to come:

Unless we see new hardware launches into the UK market over the next 2 years, which appears unlikely at present, then we believe profits will peak this year and fall consistently over the following three years.

UK games retailer Game, on the other hand, believes otherwise. According to its chief executive, Lisa Morgan, the market is "absolutely not" at its peak. She remarks that the market is driven by an already diverse set of consoles. Another analyst, Nick Bubb of Pali International, echoes these sentiments: "Given the much broader and deeper range of formats and consumers involved...the games market boom is likely to continue."

Although I disagree with Stevenson's remark, he does pose a chicken-and-egg question worth contemplating on: does hardware sell software, or does software sell hardware? That question may be hard to answer, given the current set of consoles in this generation. What do you guys think?

Buy: [Super Smash Bros. Brawl]
Buy: [Grand Theft Auto 4 (PS3)]
Buy: [Grand Theft Auto 4 (Xbox 360)]