I agree mostly with this! I think next generation we are going to see a larger move towards innovation from Sony and Microsoft and a move of power for Nintendo.

Expect Microsoft to unviel some new kind of controller to compete with the Wiimote I'm not sure just what they will do but they have been experimenting with new controller styles for a while now.

Sony already incorporated tilt control into the PS3 controller after seeing Nintendo incorporate motion control. I'd expect Sony to further that with some new kind of gysmo to make their console more unique! I think Sony will try to push digital distribution and BluRay as much as possible with PS4!

Nintendo on the other hand I don't see innovating much along the lines of hardware. Maybe including a speaker in the Wiimote and rumble in the nunchuck. However Miyamoto already confirmed the next console will have HD so I expect Nintendo to take this chance to put as much power in its next console as possible while maintaining price point! Again I don't expect Nintendo to include a movie playing format in the console and worry more about graphical and hardware performance! My predictions

Wii2 - 2011 - 299$

X-Box3 - 2010 - 399$

PS4 - 2011 - 450$ 

I agree with your main point of the next consoles most likley being cheaper, but in theory, they could still cost a good sum of cash. It just all depends on how much new stuff the companies want to throw at them. Sony proved this gen that no one wants a $600 (primary sku) system. However, they also somehow managed to prove that a good number of people don't mind paying for a $500 (primary sku) system. Still, I think it will be a $400 ceiling on all next gen consoles.

Also, and this has been sorta noted by various people too, but a 10 year plan (by sony) most likely doesn't mean that the ps4 will come 10 years after the ps3. It's most likely a 6-8 year plan with the ps3 as their primary focus and a slow burn for the remaining years (much like what is going on with the ps2). Hence my 2013 ps4 prediction.

Next Nintendo: Will use a GPGPU by ATI, SSHDD and will beat the crap out of PS3 and current PCs in term of graphics. Obviously, it will support 1080p at 60fps on all games, no exceptions, no slowdowns. It will feature motion controlling again, but infinitely more advanced, and head tracking. Will sale for $299 and will launch in late 2013.

Next Xbox: Will use a GPGPU by ATI, but probably a bit more powerful than Nintendo's. Traditional HDD, WiFi and motion controllers comparable to the Wii's, but much less advanced than Next Nintendo's. Will launch for $370 in late 2012.

Next Playstation:
Pessimistic prediction: There will be no PS4.
Optimistic prediction: Will feature the same DualShock form factor, but with tacked on pointer and better motion sensing. Will feature a traditional HDD, will not feature a proper GPU, but a multi-Cell architecture and all developers will hate it. Sony will learn from their mistake, and will launch for $450 in 2011 (at earliest) or mid 2012 (at latest).

Nintendo: Finally takes the Wii to a HD level with the Wiiii and they'll do another innovative step forward, I just dont know what.

XboX 720: More powerful and stuff.

Ps3: Sony sticks with this system and launches a huge Software update that they will call "version: Ps4". Sony will sell the huge update for $50 - $100 bucks (which will be well worth it for the content provided) but this will send outrage everywhere cuz Sony haters and websites will have headlines titled "I'm not paying that much for an update ".

Another Prediction by Me:
Nintendo: Sells another innovative system with yet again a dirt cheap price of $250.

Microsoft: They fight Nintendo head-on and come out with there own innovative device and also sell there system for $250.

Sony: They learn nothing this gen and create the Ultimate system with insane specs and launches with the price of $16,499. They have 2 games at launch and 1 man camps out in front of Best Buy to buy it.

My Next-gen Software prediction:

Microsoft: HALO 5 comes out and explains the story of how Master Chief destroys half the galaxy with his erection. The game breaks all previous sales records.

Sony: Kojima surprises everyone with the release of MGS5. You play as Solid Snake in a retirement home as you try to get the last banana pudding during brunch.

Nintendo: They come out with another Super Smash Bros. Except Nintendo knows there fans arent kids anymore so Super Smash Bros comes out as the first ever console ADULT ONLY game.

Multi-platform: VALvE releases "The Black Box" which contains every piece of software between 1980 and 2010.

^probably the greatest 2 predictions known to man.

We've talked expected release dates before (2011-12), so I'm just going to focus in on price. If the console manufacturers have learned anything this generation, they will not repeat the mistake of overpricing their consoles in the future. I believe we'll see all three next gen systems debut at a lower price point than their predecessors. (Well, maybe not the Wii 2 since it was fairly cheap compared to the other two system at $250.)