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I'd say hurt. There is going to be about 0 chance of PS3 and 360 having a similar combined install base then PS2+Xbox in my opinion.

Most people only own one console a generation, and I don't see this changing. If the people who already play videogames own one console per generation i don't see the newbies suddenly spending even more money on their new hobby for a new system.

What most people fail to realize... is that you... guy who reads this site are the EXTREME minority when it comes to videogame consumers.

Most people (not counting the new casuals) don't even dream of owning more then one system, and never have.  Even when the systems drop to extremely low prices.