Yesterday, at Microsoft Financial Analyst Meeting 2004, Microsoft's CEO Steve Ballmer said that the Xbox 2 won't be launched in 2005. He said: "There is no new Xbox in the next year, but, man, are we hard at work on that next Xbox".
It's unsure if he's referring to fiscal or calendar year 2005.
If that "next year" means calendar 2005, the next generation console war could start in 2006 when Nintendo and Sony are also launching their next-generation systems. If Ballmer meant by "the next year" the next 12 months or fiscal 2005, then the Xbox 2 could still launch in Fall 2005, just in time for the Christmas season. Considering they are in a financial meeting, it is probable he meant fiscal 2005, which ends in June 30, 2005.