Usually we can predict future trends by how hardware has progressed over the years
Is there any trend we can see in Ninty HW going from NES to SNES to N64 etc.?

You make a sound argument as always, but the only point that i can think to throw against that is that, depending on how you choose to look at it, the technology for the N6 has already been made: it's called Xenos and Xenon. Certainly there are some problems (like DirectX), but basically you've got an HD-ballpark console that's operating under concepts that Nintendo developers are already familiar with. A modified setup similar to Xenos and Xenon to work out their problems and make them similar enough to Gekko-type specifications, would minimize R&D costs, and they could be working with proven technology already, and have something that 3rd parties have gotten extremely accustomed to

It all depends on what Nintendo wants, of course.

The title is wrong. Processors do not make a killer combo. Games do. Thinking otherwise is part of the problem with skyrocketing costs.

Intel showed off a realtime ray-traced demo of Quake Wars on a Larrabee prototype a few months ago.

http://en.wikipedia.org/wiki/Quake_Wars:_Ray_Traced

From the wiki:

Improvements through using ray tracing
Force field shader

    * Shadows: Besides the usual hard shadows that are easily generated by using a ray tracer this project also highlighted the benefits of getting plausible shadows through partial transparent objects. This has first been shown on a force field shader that changes transparency and color over time. The intensity of the shadows changes accordingly [3]. Another example of this is a windmill model with blue sails that project colored shadows[4]. As of 2009 no commercially released game has shown different intensity colored shadows from partial transparent objects.

Ray traced water

    * Water: Accurate, per pixel exact reflections and refractions have been shown on a dynamic water surface with wave simulation surrounding an island. In a traditional rasterizer these effects are only possible in a less accurate manner through generating separate reflection textures and usually some distortion algorithm that simulates a refraction-like behavior.

Total reflection seen under the water

    * Under water: Through simulating correct reflections and refractions the player is able to see the total internal reflection effect if he is under the water surface and looks up to the sky. As of 2009 no commercially released game has shown this special effect.

Reflecting scope of sniper rifle

    * Gameplay enhancing: The lens of the game's sniper rifle has been changed to show physical correct reflections of the environment behind the player. To achieve this in a traditional rasterized renderer another view would have been needed to be rendered, stored in a texture and projected back onto the lens. Enabling this effect in the ray tracer had only a 1% performance impact on the frame rate[5].

Dome made out of glass

    * Glass: To demonstrate the properties of a ray traced glass shader a dome has been shown consisting of a glass surface that correctly reflects the surrounding environment including all dynamic objects.
    * Collision detection: Besides handling the graphical tasks the ray tracer has also been used to calculate collision detection[6].

Camera portals in camera portals

    * Portals: Multiple recursion of camera portals has been shown. This effect is already known from other games like Portal with a default recursion depth of 10. In comparison to that the ray traced implementation has been achieved through only one line of ray tracing shading language code and shows a recursion depth of up to 250[7].
    * Massive dynamics: To prove that highly dynamic scenes can also be handled in a ray tracer, 500 player objects have been added to the scene and animated[8][9].

Intel stopped talking about Larrabee a while ago and shelved it because they realized it was a bad idea.

You can't compete in price/performance with graphic cards, turns out no matter how much raw power and threads you give a cpu-that-does-it-all, it's more efficient to have separate entities do their own different types of calculations.

Graphics isn't Intel's cup of tea.

actually raw power powerpc it's alot better.
and the mobile market ARM it's way ahead.

Real time ray-tracing will probably be one of the key features of the "Crysis" of next generation; and by that I mean, a game released 12 to 18 months after the most powerful console and requires multiple high-end graphics cards to play on medium settings at a reasonable frame-rate and resolution. The screenshots from this game will be spectacular, but it will be the next generation where the hardware is available to produce these kinds of graphics in real time on a console.

With that said, I think you will see a handful of true ray-traced games and quite a few hybrid raster/ray-traced games but most games will stick with the conventional raster approach due to performance concerns.

If Nintendo goes x86 for Wii2, it'll be with Fusion I'd imagine, and not anything from Intel.

But who knows.

Thank you .

Well in terms of development, X86 is even more proven than PowerPC so thats not a problem. A larrabee 2 style GPU/CPU hybrid is capable of using both rasterization and ray tracting techniques. In that respect as its simply a more programable version of existing GPU style hardware if you want to use traditional rasterization it would effectively act no differently assuming the software back-end is sufficiently mature. It need not be any more different or complicated than any other architecture, I assure you!

In this instance the technology is to enable more visually pleasing, not more realistic looking games whilst attempting to limit development costs. The killer combination is the technologies suitability for Nintendos applications.

I think the PowerPC CPUs are just fine.