As we haven't seen the other GPUs (and we're not talking about CPUs - I hope that was a typo), I don't think we can seriously comment on whether either of the new consoles will have "similar to off-the-shelf" GPUs. The leaks aren't informative enough to decide that.

Sony and MS will start selling game software on other platforms because PS4 and 720 will  essentially be non-upgradeable PCs that will be outdated in a year or two similar to...basically all other consoles before them?

Yes, that seems like a logical reason for such a conclusion.

I only mentioned the WiiU CPU, because it's the odd one out. It's a custom design, but if reports are to be believed it's an old one - a GC/Wii based architecture with higher clock and additional cores, which would explain nicely why the WiiU plays Wii games.

I might give too much credit to the leaks we had the last days, but I think they look very possible. The Jaguar core CPUs in MSony's new consoles is straight off-the-shelf HW (well, not released yet), while the GPUs seem to have a little bit different configurations than standard GPUs, but base on GCN or GCN2 architecture, and WiiU's GPU is very likely to be based on the 5D-VLIV architecture, so that's all standard computer hardware with some slight customizations.

On the other hands the Cell in PS3, that was a total custom design, and so are the Emotion Engine and Graphics Synthesizer in the PS2 for example.

As I said, the problem is that we haven't seen the other ones, and the leaks don't list all of the information about the new chips.

Cell was a CPU, not a GPU, as was Emotion Engine. We're talking GPU, since we're looking at nVidia. Cell also wasn't custom design, it was very much Sony's standard CPU design of the time.

Xenos, in the 360, was a custom GPU that was very similar to an ATI Radeon X1800 series... but it wasn't quite the same, despite having similar features and performance. There's no reason to assume that the next MS console's GPU will be any less custom. Same with the PS4's GPU.

The Xenos deviated a lot from the R520 architecture in that it used unified shaders, while the R520 still was using dedicated pixel and vertex shaders -  so that's a big differentiation. I don't see why any of the new consoles GPUs would feature a similarly big distinction from the core architecture they are based on, at most it will be configurations (clock/active CUs/ROPs/..).

Nvidia isn't only producing GPUs though, with the Tegra they have ARM SoCs in their line-up aswell, and limiting the talk to GPUs seems unnecessary to me anyway as CPUs are likely to show the same shift from fully custom designed chips to using existing tech in consoles aswell. After all this topic really is about console manufacturers using PC-esque hw instead of developing something totally new, right?

Actually, they don't seem outdated. Maybe after 4-5 years, yes, but only based on bare specs alone do they seem outdated so soon.

And as consoles, everything is a billion times for optimized because you are developing for 1 set hardware configuration instead of billions of possibilties. This allows performance to continue to grow while hardware does not, and prevents stagnation for several years.

Even if what you claim ever does come to pass, the next step would simply be to make a modular console. If PC's were threatening consoles so badly, MS/Sony/Nintendo would simply make a modular PC design where graphics cards, memory, hard drive, and CPU could be swapped in and out. After 2 years, if you WANT to upgrade, spend $200 and get more RAM, better GPU, better CPU (again cheaper for consoles because of mass production of only 1 type of product each, only 1 licensed brand) and be done. Developers would then simply only have to account for 2 sets of hardware or just 8 possible combinations of hardware total.

Either way, I don't see console gaming going anywhere until the day that PC's are much more "similar" in design to one another. Consoles vs PC is kind of like smart phones these days. You have people who love Apple and only release 1 model every year or so, or you have people who love Android and the choice they have in hundreds of different phones each year.

Ironically, though, I love console gaming and Android smartphones :)

Personally I see nothing wrong with what the Nvidia spokesperson said.

But from what I read a standard high performance PC GPU would also come with some 2D, Windows and Office stuff that is useless in gaming. So to save pennies you get rid of the instructions you don't want.
So the chips would be bespoke (custom made) anyway and fine tuned to the rest of the hardware. As I said I read this somewhere and it made sense to me but I am no expert and I am open to correction.

He's only speaking about graphics, though. His point doesn't relate at all to established business models where the giant first-party publishers build a machine and license to third-parties, and where first-party publishers make software exclusive to their hardware where they achieve sales by selling both hardware and software. Thereby are able to invest in giant development teams where they keep a steady stream of games coming. It's a very profitable venture if it's done right. Losing half of your business because graphics-chip companies say proprietary hardware isn't necessary anymore is really not an acceptable solution.

I wouldn't say explode. AMD is the walking dead in the CPU market, so console chips and graphics cards are the only thing keeping them alive.

ATI acquisition may have been the best move AMD ever made, I just hope the dying CPU maker doesn't drag the GPU maker down with it.

I don't see why GPU manufacturers (and CPU manufacturers, for that matter) would be any less likely to incorporate more recent technologies (in terms of chip features) into older chip designs in order to maximise the capability relative to cost for the console makers than they used to be.

As you correctly point out, Xenos's changes from the E520 architecture added features that were introduced in more recent chipsets. Same with most of the other GPUs in consoles - they are modified to add more modern features.