"what happens in the next gen if all the consoles encourage big budget games?"
That won't happen, at least not with Nintendo. They already said that the next console will also be able to support non HD games.
Currently Playing: Shin Megami Tensei: Devil Survivor Overclocked, Professor Layton and the Curious Village
Anticipating: Xenoblade, The Last Story, Mario Kart 7, Rayman Origins, Zelda SS, Crush3D, Tales of the Abyss 3DS, MGS:Snake Eater 3DS, RE:Revelations, Time Travellers, Professor Layton vs. Ace Attorney, Luigi's Mansion 2, MH TriG, DQ Monsters, Heroes of Ruin