Going for long generations is probably necessary when you're selling heavily subsidized hardware. Neither Sony or Microsoft are going to push for the 9th generation unless they absolutely have to. I'm anticipating Apple TV, Google, Samsung, Ouya and a few other companies to try to get in on the console market this and next year which will hopefully halt the graphics arms race.
Where are EA, Activision, and Ubisoft going to go if the home console market fails? Nintendo aren't going to provide powerful enough hardware, and the PC market is more crowded and ripe with piracy. If the PS4 launches at a more acceptable price than last time then I believe it's going to do quite well. Same with Xbox 8.