Personally I think there is some really strange prediction in here.
1- Besides Atom none dev a no 64bits CPU in the last 5 years from a the cheapest (
0$ to the consumer) to the pricier and even without RAM to play both 360/PS3 have 64bits CPUs.
Is there any reason why would the put more powerfull and tech advanced CPUs that would go against the last 7 (by then) years of dev?
2- There is no reason why someone would go with less than low PC class processors, in fact go with to much outdated HW can be pricier (the RAM is a good example as DDR2 will be soon more expensive than DDR3), unless it is a SoC. BTW todays low end HW (eg a X3+4670) would beat the 360 in anyday in realworld situations.
3- It is getting harder and harder to go into smaller silicon so a big/hot chip in 22nm is quite improbable.
4- There is no reason why Nintendo would want LRB (unless it is really really cheap) they would want something as cold and easy to use/explore as they could get. And not going for a powerfull console (like most predict) would make it less atractive for Intel. Unused HW (or only used for a few) dont really make much sense for them, as their big hit games dont care for gfx.
As an observation each time less games are showing their gfx/tech as a selling point (still something will need more processing). Also todays gfx cards even in 256bits and DDR3 seems quite good at HD rez.
My prediction is that they will go with costumized comum HW from the time (eg the equivalent to a X3+4770+DDR5(6?), just as reference from whatever company offers them a better deal) that could scale well to a lower priced HW (eg a future SoC) over a long time.
That come from several things:
1- That will be powerfull enought for most people
2- There will be litle worry in the tech department (like it already happened with the sound this, and meybe even a litle bit in the last, gen), so they will cut cost in the R&D of the processors (and SW, dev tools etc...), functional and cheap will be the priority. Althought some cool thing like SSD/no loading or EDRAM tech etc may happen.
3- They will show/sell other things, from interfaces to services, upgrades(? eg interfaces).
4- Again the future for silicon is unknow.
So a good upgrade on the HW, but it will not make any smiles in geeks (probably some sadness even)
.
But I belife it will make other kind of geekness quite exited.