As we approach the 7th anniversary of the X-Box 360 release and the 5th for the PS3 and Wii, one has to wonder when we will hear another round of legit 100% non rumor news on the next consoles. The only thing we have seen so far is the intro of the Wii-U last year. But all that will be basically is an update to put it on par hardware wise with the 360 and PS3. Besides the I Pad like controllers (http://wiiuinsiders.com/wii-u-controller/) the system is not a significant step up in processing power by any stretch.
Motion controls have already been added to both consoles that didn't have it from launch...so that takes away another innovation that Sony or Microsoft could use to push a new machine. Besides that though...motion controls were not a good thing to use for that, and both companies were right to add it on to their current systems.
Console cycles typically have lasted about 5 years before it's replacement was officially announced or even put out to sell. But these current systems seem positioned to break that trend. Sony has preached consistently about a "10 year lifecycle" for the PS3. Many took that as corporate spin at the time, but it may turn out to actually be true.
While both consoles have been eclipsed by top of the line PC graphics....the gap is still not NEARLY enough to make a new console seem attractive to a consumer based on saying "it has better graphics. Put a game life Battlefield 3 side by side(PC and console version)...and of course the PC version looks better. But not a leap like from a PS2 to PC games put out in 2004. The gap was far larger then.
It used to be that the the gap was large(between PC and console) every generation. But the current one is different. These current systems were designed to be more cutting edge that any before it. Maybe they're not cutting edge anymore, but they're still close enough to make people forget that.
So what will be the innovation be that makes a new $500-700 machine make sense financially to be put out? Will it be a service like Onlive? http://www.onlive.com/ A cloud gaming service that basically sends a game to your TV or PC from an outside server as you play it. Making (in theory) hardware specs on a PC useless...since YOUR PC is not the PC running the game. The technology is not perfect yet though. Games are laggy on OnLive...and players have also experience downgrades in graphics and video compression.
The tech may not be quite where it needs to be yet...this idea will one day make what we've knows as home gaming machines totally obsolete. Another form of entertainment which moves away from physical media and into the digital world. Just as music and movies have.