Actually Sony and Microsoft should lower their heads to Nintendo and thank for their mercy.
The only thing that prevented the Wii from reigning supreme atop the seventh generation instead of just grabbing half of the pie like it did resides in the single fact that the Wii is not HD.
How would the PS3/360 fare against a Wii hosting titles like GTA IV, Bioshock, FF XIII, Fallout 3, Oblivion, etc with similar graphics and the Wii remote to boot?
The HD duo have some damn good exclusives, but could do little to prevent the Wii from reaching a supremacy similar to the PS1/PS2 times or even bigger.
Fortunately for them The big N won't come with a Wii sucessor until having a well established 3DS and it shouldn´t happen untill the end of 2011 at least, giving some time for the PS Move and Kinect to shine, but it won't be long before the Eighth Generation begins and the Arms Race start all over again.
