a lot of pure shit is putting up big numbers on wii. like why the fuck did we spend three years and 50 million dollars when a beach game with dreamcast graphics is going to make more.
Wouldn't this market get saturated pretty fast though? I mean, those kind of people playing the latest shitware don't buy games very often, nor are they very keen in buying them for full price. I mean, look at the casual games industry on the PC, where everyone steals everyone else's ideas and the market is totally clogged and not super profitable unless you get a real hit (hey just like big-budget hardcore gaming).
The big budget stuff is still going to happen. It'll just be approved even more conservatively and in less volume, and with a forward focus on building franchises that they can milk huge amounts of money from via derviative, lower-budget products.
As for hardware, yeah I doubt we'll see the normal jump in tech from anyone next go around. It's clearly not required, and I'm sure the players involved would rather not fork over huge amounts of cash just to be the most powerful system.