In 2010/2011 hardware technology will have advanced to the point where you should be able to produce a system which is 8 to 12 times as powerful as the PS3/XBox 360 and sell it for $200 to $300. At the same time the game development costs to take advantage of this additional processing power will not be that much higher than current development costs (for PC, PS3 and XBox 360 games) because games will (mostly) just be using more refined versions of the same graphical techniques they are using today. In rough terms I would expect that most games would have a similar look to what you would see from a PS3/XBox 360 game if it was running at 30fps at a resolution of 480p except these games will run at 60fps at 1080p (with 16xAA and 16xAF); the overall effect will be very similar to a CG movie that has been produced in the past couple of years.
At least one of the companies will take advantage of this inexpensive and powerful technology and release a console in 2010/2011 which will dramatically change the dynamics of the market; they will be able to combine all the things people like about each of the systems on the market today (Wiimote, Blu-Ray, XBox Live, etc.) in one inexpensive package which will force their competition to respond.
