My reasoning:

The x360 will see its successor by 2011 due to hardware problems, DVD limitations and M$ insistence being the first on the scene and this time around M$ would have made money to cover R&D costs.

The wii will get an upgrade to HD since SDtvs would eventually become obsolete and 512 mb of memory is just pitiful for current standards.

The ps3 would last 2 generations while its developments costs ultimately fall and it becomes like the ps2 gen again where Sony was around first with the worst hardware power. PS3 is the most future-proof with a SATA HDD, blu-ray, gigabit ethernet, etc. Also, ps3 would not make enough money for ps4  R&D costs till the nex-gen of consoles. The ps4 would eventually release slightly before the gen after the next gen as the first on the scene.

There would be no major technology overhaul used on any console again and no company would take a loss on consoles.

What do you guys think of my predictions?

Doesn't Sony have the money to make a ps4? Their gaming division isn't the only one.

Gaming is going to go downhill.

If Nintendo and Microsoft release systems which are far more powerful and feature rich than the PS3, use a user-interface that is based on the Wiimote (but is dramatically better), and are released at an affordable price ($300) why would someone continue to buy a PS3 that uses an obsolete controller and has outdated graphics?

If sticking with the PS3 is such a great plan, why didn't Sony stick with the titan that is the PS2 and ride out this current gen without making a PS3?
Sony's console will last 5-6 years, and will probably be supported/sold for at least 7-8

A controller can be updated, user-interface also, and as Wii shows, graphics doesn't always matter.

So, Microsoft can't fix the reliability issues without making a new console, Nintendo can't come up with a storage solution without a making a new console, and Sony simply can't MAKE a new console.

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In 2012 512 MB memory will be nothing and blu-ray will outsell dvd.

If blu-ray players and discs are affordable, I don't see why it wouldn't happen. It's only logical that the price will come down with time.

For the next generation of consoles, Microsoft is rumored to release theirs before the competition again in 2011. From what I hear they will use digital distribution as their main medium.

Supposedly the PS3 is somewhat future-proof because "the true power of the cell" is yet to be tapped, and Sony will delay the launch of the PS4 until 2013 where it will have noticeable technical edge over the 360. 3rd parties will still develop exclusives for it because the technical edge by itself will give it an identity separate from the 360 unlike this generation.

Both consoles will have me too wii-motes with their own tweaks and Nintendo will probably boost their console's power so that it's equal in power to the HD consoles of this generation. They will simply refine their motion controller and add a legitimate network.

i dunno, i think the next xbox will be out in 2011 with PS4 and Wii 2 out in 2012 or 2013