In terms of storage media I think that a HD disc, flash based memory and downloadable content will all be viable in the next generation; in 2011 a 8GB to 16GB flash cartridge may be possible for game media and by 2014 it should easily be in the 32GB to 64GB range, Blu-Ray and HD-DVD will be dirt cheap, and people will have bandwith to support 1GB to 2GB downloads. I personally hope for flash based games but expect to see HD-DVD and Blu-Ray based games.
I expect Nintendo to focus on 1080i and 720p while producing a system which falls between the processing power of the XBox 360/PS3 and XBox 720/PS4; they will include a much improved version of the Wiimote and will sell their system for $200 to $300.
Microsoft is going to take its expanding userbase as a sign that they did the correct thing with the XBox 360; they're going to continue to try to "push the limits" in terms of hardware, focus on online content. They will move towards a hybrid between a conventional controller and a Wiimote-Nunchuck by adding more buttions and pressure sensitive verisons of most buttons.
Sony's next system will largely depend on whether they learnt their lesson with the PS3 or not...







