Consider that console saturation points are for various price points. For example, the 360 may be approaching saturation at its current price point, but would likely sell like crazy at $99 in America.
The 360 hasn't significantly dropped in price, and is still $280 or $350 to most gamers. A significant price drop (Say, $199/$249 for the arcade/premium respectively) could increase sales significantly for a while.
The first problem is that the 360 seems to cost significantly more than the original Xbox did, so Microsoft has to keep its price higher. The second problem is that MS is trying very hard right now to maintain profitability on their Xbox division, which means they're reluctant to drop their price. Sony, also is focused more on profits than sales numbers, suggesting that both systems could weather 2008 without price drops.
