It's hard to tell because I think consoles are about to hit a lull in advancement because they had a huge graphics/memory leap over the last say 10 years. The proof seems to be in the fact Sony not coming out with nothing new in at least 2-3 years, Nintendo new system only brings them a hair over what's out now, gotta figure that will be out 4-5 years.
And microsoft new xbox will be sharper then the 360 but I think the days of OMG! Leaps are a good ways away. Not to mention consoles have mobile/social competition that is charging hard at their market share. Which IMO is gonna continue to take huge leaps because a lot of the gameplay is better on these games.
As anyone thats been gaming as long as I have (Atari days) will most likely agree that yea games today are graphically gorgeous but the great gameplay are so few and far between titles. Love or hate Nintendo and their "kid" games they have been killing the so called powerhouses with the same crop of super strong games for gameplay I.e Zelda, Mario etc while being a generation behind on graphics.
I see the set top traditional consuls dying off actually as Internet speeds get better and better and we get our games through greatly improved mobile devices, which are double/tripling In power each year. Just picture a iPad like device (or iPad itself) that plays games at PS3 or better graphics and can be streamed to your tv or taken with u wherever you go. That would be sweet!