But Nintendo would never accept it

I say that Atari will release the astounishing Atari Flashback 3. FTW !

The market only remains unfriendly to those who attempt to enter it the same way that everybody else does. As I noted, few have the sort of financial muscle to play the game the way Sony and Microsoft do, ie. brute-force entry into a mostly unwilling market, with hardware selling at a loss to ensure a high level of hardware distribution as quickly as possible. Those who take Nintendo's approach of providing people with a new way to play games instead of an old way to play games with incrementally better visuals and audio have a far better chance of success.

As for game budgets getting overboard, that's because developers choose to bling their games out with top-of-the-line graphics and other such audio-visual gimmicks. Quite frankly, they could make far more by producing games that large numbers of people want to play, and forget about making them look and sound like they came out of Hollywood. While some may like the idea of combining the cinema into gaming, most are content to play their games and watch their movies, with the only overlap between the two being licensed games based off of movies and licensed movies based off of games.

Eh eh it's not so easy. Nintendo had not only the balls ( cash in the bank to risk ) and the will to disrupt the market it also had the know-how to do it ( one of the strongest software deveopment in the planet and the best software-hardware integration in the entire industry )

you forget that "new ways of playing" don't happen every gen, rather, they happen every 2-3 gens, thus, you can't have a competitor "innovate" their way into the market every gen

Sure you can. It's more than possible, in fact. The thing is that Nintendo goes to great lengths to come up with the innovations first. Ever notice how every single Wii peripheral has an NES equivalent? This process of elimination of options for potential competition is nothing new to them; it's their method of market security. You'd have to come up with something that completely blindsides Nintendo and gives an even more unique gameplay experience than anything the Wii and DS can offer to outdo them at this point. And about as far as anybody can figure for that at this point would be virtual reality done in an affordable fashion.

As other people have hit on, There is a significant front-cost involved in going into the hardware business. A company has to be able to take an initial loss in hopes that it will profit in the long run. i.e. Microsoft. Sony was able to come into the market because they were already contracted for the CD-ROM drives by Nintendo, then Nintendo scrapped the playstation and Sony got the rights to it. Apple seems like a likely candidate to enter because of the fact that 1.) they already work with Hardware and protocols + Development, so they would be much more intuitive than Microsoft. but, remember Chipsets don't come cheap. I'm not sure about Nintendo but word around the industry is that these companys (Sony and Microsoft) lose money on the Hardware (not including pending lawsuits afterwards) and hope to gain it back through liscences and software sales. So you have that to consider. Plus which considering the absurd price of a SH-i*Pod I imagine Apple would have a price tag on their console that would make 3DO blush. If I were to say a company that would do it I would put my money on SAMSUNG. Their growth in electronics has been astounding lately and they show no signs of slowing up. If Toshiba had won the format war than I could see a partnership with Panasonic working out.

I'm not so sure about it. Virtual Realty IMO is intimidating because is a too heavy fleed from reality ( the wiimote greatness is that can be immediately understand by anyone that has ever use a stick ).

Who can be the early adopters ? I think that because of its intimidating nature they would be core gamers but the problem is that an "affordable fashion" design will be seen by many of them ( higher tiers ) like cheap.

However a virtual reality system could be add new values in term of immersion the problem is that in this industry it is the software that is disruptive and I don't see who can produce it and how it will be ( but it is normal ).

Gyroscope is an old technology what made Wii the phenomenon like it is , is Nintendo know how ( Nintendo is a natural disruptor of Interactive Entertainment Industry ).

Another problem with a virtual reality system is the marketing: how the hell do you advertaise it ? It was the same problem faced by Nintendo with Virtual Boy ( althought it wasn't a real vierual reality system ).

Ok, let's see... I could bet, that none of the big 3rd party developers aren't going to make their own console, since it doesn't fit their business strategy with multiplatform titles and in case of the console flopping, it would hurt badly their existing IP:s value.
So, it would need to be and outsider, or atleast someone, whos profit doesn't rely on game software (this is practically how Nintendo, Sega, Sony and M$ has entered the console market). Developing a console requires a lot of money, as well as retail relations (theoretically, even your local grocery could launch a console tomorrow) and relations with software developers.
Now, when you look at it, there's not many companies in the world, who fit the standards. I actually can only think of one company, who might enter the home console market next (although, Apple is not completely out of the question) and that would be Nokia.
Nokia has the resources, its profit doesn't rely on games, it has experience in hardware manufacturing, it has a ready retail channel, it has relations to games developers and publishers, it has internal software department and it has interest to expand in gaming. Although, i wouldn't expect a "traditional" games console from them, more like a PS3 kind of solution, an set-top-box with interchangeable games.

@Sky render: When you count how much Nintendo invested in Wii, you need to take into account their more than 3 decades of experience in making games. That was what they invested in Wii (and DS).