I don't think we're in a crash but things are definitely going to have to change, and the gen has dragged on for way too long.
We need a new gen, we need consoles to become as attractive for indies as iOS and Android are, and we need a big push into digital. It's unlikely the industry will expand much more, in fact I think it may contract to PS1/N64 levels (in terms of total console sold next gen), but that isn't a crash. That's just the casuals going to other things like smartphones. But there will always be a (fairly large, IMO) audience for dedicated gaming hardware.
The problem is that publishers need to reign in dev costs severely and start investing in a larger amount of new IPs and innovative games, and that's the only thing I don't really see happening until absolutely necessary unfortunately. It's more likely that publishers are going to crash IMO, devs will just find new avenues to make games and it's up to console makers to ensure that they can get on board.
Kickstarter and digital distribution have shone a light on how vestigial publishers are, and they need to adapt or die.