death of the 3rd party exclusive?

So the news yesterday that Devil May Cry 4 was going to move to 360 and PC along with PS3 shook some people up. It's the latest step in a new trend that the industry is seeing in this new generation of consoles: non-exclusivity of 3rd party games.

Let me explain what I mean by "3rd party". "1st party developers"...those are in-house studios owned by Nintendo or Sony of Microsoft who make games just for that one company. Microsoft Game Studios, Sony Computer Entertainment America, and, well, Nintendo are all examples. 2nd party developers are groups who only make games for one console, but aren't technically owned by the guys they make games for: Bungie (makers of Halo) is an example. Finally, 3rd party devs make games for whoever they want: most big names in the industry fall under this umbrella, including EA, Capcom, and Squaresoft.

Anyway, last generation we saw lots of 3rd party exclusive games which defined the consoles: Sony had Metal Gear Solid, GTAIII, Finaly Fantasy VII-X, the Katamari games, and yes, the Devil May Cry games, all made by 3rd parties, all exclusive to PS1 and PS2 (at least at launch). So why are we seeing people going away from this? The cost to make new games in this new generation is simply too high to risk releasing a game on just one platform unless the console company pays you a premium. Games like Assassin's Creed, GTAIV, and now Deviy May Cry were all expected to be PS3 exclusives at first...but that's not so anymore.

So what will happen in response in the 360 vs. PS3 war? With 3rd party games being less of a differentiating factor, other things will be the key differences: online support, technical superiority, and 1st party games. So far I would say 360 has better online support, Sony has (slightly) better 1st party support, and they're about even on technology.

Who doesn't need to worry about this so much? Nintendo. The Wii is a completely different experience than either of these consoles, and besides, it couldn't match the specs needed to run games like DMC4 or GTAIV anyway. Instead, it's focusing on innovation and low cost.