I think people underestimate the power of people who play games casualy. We see the term casual and think of Wii Fit or Nintendogs or Just Dance, etc. but really it just means people who play games less than so called 'hardcore' gamers. It usually means people who play a certain game because their friends or family or coworkers do.
A large portion of the users of the PS3 and XBox360, I believe, fit into this mold - but instead of the games I listed they used to play games like Guitar Hero/Rock Band and now play games like Call of Duty. They are just as susceptible to being lured away by things like smartphones and tablets as Nintendo's customers, those things just have to become 'cool' and they will flock to them.
I see the recent mediocre releases of fairly large PS360 games (ie. Gears of War, God of War, etc. and even COD which is on track to do less than the last iteration) and that these games did very little to boost week-to-week hardware sales and I believe that is an indicator that mainly the same customers are continuing to buy games as opposed to additonal customers. The lower numbers could indicate that those customer's numbers are shrinking and while a new gen should hopefully re-spark that 'coolness' factor, but it could just as easily miss or underperform and we could see more of the studio closings and downsizing, etc. that we have been seeing over the last few years.
The market will adjust to those factors however, if traditional gaming becomes less popular there will be less game makers and games - which could be a good think (quality over quantity), conversely I also see a bubble burst of sorts on the App Store/Android horizon so those same customers could come flocking back under the right circumstances.








