The 8th gen will be the weakest console generation in terms of graphical upgrades, and here's why...
Atari 2600: 192x160; 128(?) color palette with 4 per scanline
NES: 256x224; 48-color palette with 16(?) per scanline
SNES: 512x478 (max); hundreds of thousands of colors
PS1: 640x480 (max); millions of colors (at this point it pretty much stops mattering)
PS2: 480p widescreen on many games
WII: 480p widescreen standard on most games; X360/PS3 support 720p standard on most games and 1080p standard on some
Basically, display technology caught up with contemporary TV technology around the time of the PS1 and has kept up with it up to the present. Now, there's no further to go unless TV manufacturers try to foist some new tech on us in the next few years (which doesn't seem very likely to happen).
This means that console manufacturers (other than Nintendo, anyway, who's already ahead of the game) will try to differentiate themselves from the crowd via means other than graphics. And that can only be a good thing.
"'Casual games' are something the 'Game Industry' invented to explain away the Wii success instead of actually listening or looking at what Nintendo did. There is no 'casual strategy' from Nintendo. 'Accessible strategy', yes, but ‘casual gamers’ is just the 'Game Industry''s polite way of saying what they feel: 'retarded gamers'."
-Sean Malstrom







