This also goes to show just how diverse gaming is becoming. Did any of us imagine at the turn of the century things like the DS, Wii, Gametap, Downloadable Content, etc. The industry is clearly becoming more and more segemented and specialized and as a result its able to reach sectors of the market it never could before. I love cars so I'll throw out a auto analogy. There's no longer a Model T of videogames. Or in other words, there's no longer one product that appeals to everyone and everyone must have. Instead you have a bunch of different offerings that are all pretty unique. In previous generations there has almost always been one very dominant player in the market and you got your games basically in one traditional package. Now there's multiple competent players and games are being packaged and marketed in so many different ways, which reflects the different tastes of all the gamers out there.
This isn't all good new though. At least not in my opinion. With greater market segmentation, it's now harder (i.e. more expensive) to get a top notch diverse gaming experience. When there was one truly dominant console, you could buy that one system and get pretty much all the great games. If you really wanted, you could buy a second console, but in most cases it wasn't necessary. I think the next step for the console makers is to produce cheaper systems, so more people can own multiple systems.
My Top 5:
Shadow of the Colossus, Metal Gear Solid 3, Shenmue, Skies of Arcadia, Chrono Trigger
My 2 nex-gen systems: PS3 
and Wii 
Prediction Aug '08: We see the PSP2 released fall '09. Graphically, it's basically the same as the current system. UMD drive ditched and replaced by 4-8gb on board flash memory. Other upgrades: 2nd analog nub, touchscreen, blutooth, motion sensor. Design: Flip-style or slider. Size: Think Iphone. Cost: $199. Will be profitable on day 1.
