I'm not sure I agree with this line: "The platforms of the next cycle may not be a console at all, but software distributed by network to convergent devices like PCs, set top boxes and smart phones." Even if the software is all digitally delivered, I'm not sure consoles themselves will be completely gone. But that's just my thinking.
I do agree that consoles next generation won't push as hard on the hardware front, and instead aim for more fun ways of playing (be it motion controls or something completely different).