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If SCE and MS reinvent, they'll both take the Nintendo approach to hardware and go with modest spec upgrades while focusing on ease of development, profitability/lower production costs and accessibility, particularly when it comes to user interface.

I would imagine MS would be the first to jump the gun on this. SCE on the other hand, would probably focus instead on pushing a PSThree model into profitability with deeper market penetration and lower costs all around.

Nintendo on the other hand, may well do an HD console to reach parity with it's competitors from a technical standpoint. Of course the smarter approach is to simply wait until it's clear that hardware limitations are what's holding back sales and stick with the platform for an extended period of time, much like the original NES.