This has been an obvious issue for a while now, that both Microsoft and Sony are facing because of the large jump in hardware tech specs from 6th to 7th gen consoles.
What this has essentially led to is that Microsoft and Sony have run out of room for justifying a hardware upgrade from the 7th gen to the 8th gen home consoles for sometime because of the associated costs of hardware production and software development.
This leaves and excellent opportunity for Nintendo, at anytime they please, can leap past both the PS3 and Xbox360 in terms of hardware power. The reason is that the upgrade to the 8th gen home console will be justified from the leap in terms of power from the Wii's hardware capabilities.
If Microsoft and Sony were to follow suit they would be unable to position their 8th gen consoles as well as Nintendo's. That would allow Nintendo to take a ton of the 8th gen market share. Microsoft's and Sony's best option is to wait out until the 9th home console gen where they will have the hardware upgrade advantage when Nintendo would not.
Though, there is concern about software development costs for both 8th and 9th gen home consoles so the majority of the market will probably shift to the handheld space where all development budget levels seem to be accepted by consumers. This is assuming there is no breakthroughs in reducing development costs or in reducing consumer's game budget expectation (that low and middle budget made games are acceptable on 8th and 9th gen home consoles).
The third option is that both the handheld and home consoles merge into one device that can function as both a standalone handheld console or wirelessly connects to a T.V. and functions as (or possibly even morph into) a console controller in console mode.
This will probably happen in the future as portable hardware specs will eventually outstrip even the largest game development budgets. And, consumers would benefit from this as they would be getting essentially a home console and a handheld console for the price of 1 system and every game purchased would share that same benefit.