I think people look at how Sony and Microsoft approached this generation as being a typical approach and how Nintendo approached this generation as being unconventional but I'm not certain that these are entirely correct ...
In 2005/2006 what would have been a very conventional console in the style of the PS2, Playstation, Gamecube, N64, SNES, NES, Dreamcast, Genesis and Master System would have been much smaller, less expensive, and had dramatically lower energy consumption than either the PS3 or XBox 360. The performance that would have been possible from a system like this would have resulted in hardware that was capable of producing the advanced graphical techniques of the PS3 or XBox 360 at standard definition, or producing graphics similar to the Wii at high definitions. While I don't think people would have rejected this approach, this is a very awkward position to be in.
While the Wii is a smaller graphical jump than was typical of a generation, many/most successful consoles have been "obsolete" technology that has been (well) marketed to convince people that it was cutting edge. In contrast, few consoles have ever cost so much while their companies lost so much in order to have larger, more powerful and less efficient hardware.
In the next generation I expect all three manufacturers to return to a position which is far more typical of a videogame console. While I'm not going to try to predict specific specifications, I imagine that this would be modified hardware that was somewhat similar to reasonably high end PC hardware from 18 to 36 months earlier ...
