In my opinion next generation will play similar to the following:
(Listing from most to least powerful)
Microsoft:
Since the Xbox 360's core base is comprised of people looking for experiences typically found on medium to high level gaming PCs, it's unlikely that Microsoft will risk losing the 40-50+ million core gamers they will have captured. It's also obvious they want some of the expanded audience. So I expect they'll try to be everything to everyone and have multiple SKUs targeted at different audiences. (With the lowest model coming with a 60-80GB hard drive)
Sony:
I expect Sony to have hardware that will be in between the successors to the Wii and 360. They have been burned pretty bad this generation with the PS3 and it's very doubtful they'll make the same mistake again. I think they'll attempt to come out with something that is creative and somewhat powerful rather than continue the arms race with Microsoft.
Nintendo:
I expect them to have the weakest hardware again since it's obvious their core audience as well as the expanded audience don't mind not having the latest and greatest hardware. In fact I expect their next system to be roughly equivalent in power to the Xbox 360.







