In the next generation I expect that either Nintendo will increase its dominance, or the market will shift towards a more balanced position. Without any "Fanboy Goggles" on, consider what the market will look like in a couple of years ...
By the end of 2010 a mid-line graphics card will (probably) be able to render images that have twice the polygonal and texture detail (and twice as complicated of shaders) as Crysis on ultra high detail while outputting at a high resolution with a high framerate; this hardware will be very affordable when put into a console in 2011/2012 and, although you will be able to produce hardware with much higher performance, it will be rendering images at a quality that few people will notice an inprovement from more powerful hardware.
Game development costs will remain sky high, and few publishers are going to take the risk of banking on one platform; in particular, after this generation most publishers are going to be fully aware that they can choose the wrong horse. There will be developers who focus on "Lower Budget" games, but it is likely that those will be games with (much) polygonal and texture detail than any Wii game;which will result in very high development costs.
When you factor this in the market will (more or less) be made up of interchangeable products, and in most markets where that is the case you either have the market shift heavily towards one product or be fairly evenly spread.
