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VGKing said:
1. No, Apple is no threat to console gaming. With increasing resolutions and increasing 4G data prices(and eventurally increasing game prices), the average consumer(console gamers) can't afford an iPad as a gaming device.
2. Yes, next-gen consoles can't play it safe but they can't go all out either. We can not have a repeat of the $599 incident. Both Sony and Microsoft will need to either release a bare-bones model of their next consoles for cheap or just take a huge loss on a fully featured console. The choice is obvious.

And the leap required isn't big. Even gen 7 is stretches ahead of the iPad3.

A gen to gen jump is required due to consumer expectations. Thing is, not much is required to keep the console to tablet gap there. WiiU will have it, Sony and MS don't need too much more, and should rather look for profitability than any bleeding edge. If they give in to Epic, they will Epically get demolished profit-wise and market-share wise (either nobody will want to pay for it, or nobody will really care).