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Squilliam said:
The Xbox 360 is 7 years old. Game developers are simply unable to make fundamentally different/better games than the console capabilities allow for. When a new generation starts the smaller developers have a chance to make a splash because they can take new concepts and bring them to life quickly whilst still making games which look better than previous generation games. Publishers give a lot of new opportunities to up and coming developers when there is a new generation.

It's still possibe to make different games but most people won't take a chance on them since they have little chance of looking as refined as the established franchises. Meanwhile franchise fatigue will slowly kill of interest in the longstanding sequals which indeed don't have any room to grow anymore. A new gen will create opportunities for both the old and new to grow again.

Plus the market is saturated with cheap current gen games by now either discounted or 2nd hand. Anyone buying a console now doesn't have any reason to buy new games except for the yearly shooter their friends are playing. The rest can all be bought on the cheap and plays just as well as new games.