If gas prices go down like 70 cents a litre then people would be able to afford to drive places and not have to stay home and play video games all day in order to save money.

@celine

But do you think graphics will keep advancing, even if it is by small margins?

Now I remember - wasn't there a crash in the Atari 2600 - Intellivision period? as a result of shovelware? now you see what I was talking about in my post above.

Someone at Nintendo ( I don't remeber who ) stated recently that they could skip  the usual sequence revolution -> evolution -> revolution.

Iwata basically stated that Wii ( and DS ) will run until they can interested people with new software offering or new accessories.

When the interest of buyers could only be sparked by a entire new hardware than they will release it.

I think this generation could be longer than useal 5 years ( if both MS and Sony want to recoup some losses ) and that Nintendo goal is to cyclically disrupt the industry using its software/hardware integration.

celine, but do you have any idea what could be the next 'disruption'?....another type of user interface?...something else?

lots of reasons
1. just like in 83 too many companies entering the industry (getting a flood of consoles)
2. The gaming popluation shrinking (which was happening in Japan but fixed thanks to nintendos strategy)
3. Developers lacking in the innovation, orginality, and new IPs.
4. The rise in developement cost for games can put a strain in the develoeprs.
5. Software not selling.

If development costs continue to rise at a rate greater than the growth of the industry as a whole you will see another "crash" in the not too distant future ...

i said this in some other thread..

its going to be a crash around 2012-2020..I saw this while i was drinking my coffee

This generation will last as long as all three manufacturers are happy with their position in the market and no new competition enters the market ...

Now, I could be wrong but I suspect that Sony and Microsoft will feel entirely happy with their position as long as their userbases continue to grow at a healthy rate (7.5+ Million consoles per year) and they continue to receive healthy third party support; now that Nintendo is in the lead, I suspect they will continue to focus on the Wii as long as they continue to sell a lot of software and no new consoles are planned to be released.

It was more complex than that

Shovelware nowadays isn't a risk because there are huge corporation specialized in good game. The problem at that time was that every company even in different industries tried to enrich them by speculating on a fad ( think that Coleco was a leather company ).

Fad brought by the weak of the new market, lack of wise leadership from Atari and  competition  from home-computer caused by the price-war started by Commodore.