Unless the something like the Wii happens all over again...

I agree.  It's clear that the WiiU controller is not going to do it.  The PS4 itself is really just a more powerful PS3 and it is a little expensive to be an explosive seller without any new features.  The XB1 atleast has some unique features, but it is very expensive to explode in sales.

Graphic chips are increasingly suffering from diminishing returns when it comes to power consumption. Nowadays increases are about the square root of 2 for every 2x die shrink. Assuming full HD displays, the technology to match current gen consoles for tablets lie, within an optimistic assumption, at the 5nm manufacturing process, which is about 10 years away, perhaps a bit more. The increases you have seen in the last few years on smartphones and tablets are half due to the advances on manufacturing processes, half on companies making them bigger and more expensive as consumer trust and demand grew for these products, and are not going to continue. In fact, even 7th gen performance is safe for a further one or two years, again, taking into account clearer and sharper displays.

Your reasoning fails because it does not take into account a lot of those consoles were sold after their successors had launched into the market. The PS2 had sold 100m by the end of 2006. Overall the 7th generation started when about 145m PS2s, XBoxes and Gamecubes had been sold - even taking into account the Dreamcast, that's less than what the PS3 and X360 did. Give PS2 an extra year if you want to compensate for this gen being longer and you are going about to match it.

PS. Phew, two posts. It may seem I'm a bit too invested in this one but I'm frankly a bit sick of random teenagers / young adults on the internet thinking in their self-righteous doom and gloom managed to beat the combined intelligence and market insight of three companies worth together hundreds of billions, and employing hundreds of thousands of people.

This is exactly what I thought. The market is getting smaller. People don't factor in that PS3 + 360 only sold 160 mil last gen. That is where supposedly the majority of hardcore gamers are counted for. So consider that number plus all the casuals going to Ipads and shit.  

I would agree that there is a diminishing return on production.  The fact is, that you can already get a tablet(razer) with a good to great display screen and more powerful than both the PS4/XB1.  The concern about displays is not really existing.  Most if not all tablets/smartphones can output in high def to a tv.  Tablets/smartphones have bluetooth capabilities, that will allow the use of compatible controllers(maybe even a PS3/PS4) if they want.  Power/battery is not a concern either.  Just plug your tablet/smartphone in while using it as a console.  Intel/AMD are really focusing on the smaller and less power consuming processors now.  THey are just competing with one another anymore, as most tablets/smartphones don't even use their processors at all.  So they have the financial capability to put 10's of billions into this area to really get the advancements to continue. 

It might be 3-5 years before a cheap enough tablet can compete with the PS4/XB1, or it could be just 2-3 years.  If it happens sooner, it really only ends the need for the consoles.  It won't replace them to the core gaming community at that point anyway.  But, within 2-3 years after that, why would any big company bother with a new console when there won't be a need to produce a stand alone system?  The capabilities of then pre-existing tablets/smartphones with adequate power will eliminate the need to produce a console.  I do believe that there will probably be one more console generation, but I doubt it will include all 3 companies.  I would guess that the market will only really need 1 console buy then(5-6 years from now).

The Wii U has failed for sure, but if the Xbox One and PS4 sell enough, and they don't try to rip us with their game prices, DLCs, Season Pass and other such bullshit, then they'll be successes.

True. Besides, the graphic jump from last generation to the new one won´t wow people, many won´t care about the difference between videogame graphics and tablet graphics . Heck. I went to Fnac yesterday and I saw a bunch of kids with their parents skipping the videogame section completely and running straight to the tablet section of the store.

Graphics alone won´t gain the casual gamer again to the console market.  

this is false, show me this tablet thats more powerful then ps4.

No. Only Wii U is a failure.