JVD, you are totally correct and for that reason alone I expect next gen consoles to outpace current PC games on the graphics level. Lets use the R500 as an example. Lets say the R500 releases in fall of 2005 and is in the ballpark of the R520 (some commentaries on the leak specs said the R500 had about 2x the shader power of the X800XT). I would expect a game made for the R500 in 2005 to look better than the best looking PC game on the R520. Obviously, any PC game that expects to make money needs to support (a) the last couple generations of GPUs and (b) run well on even low end parts with modest settings. If it cannot do this your hurt your install base. I think this is one reason games like Deer Hunter, the Sims, and even Myst (which looked great for stills and only required a CD-ROM) in the past sold so well. On the reverse a game designed for the R500 is aiming to exploit the HW and use every ounce of power it has.
The other issue you hit on is effeciency. Having to take into account different HW architectures and program to an API really cuts down on tweaking and optimizing. Dave had mentioned the other day when someone had asked about optimization of ATI cards that in reality the life cycle of GPUs is so short that these cards are never fully explored. The advantage of a Console is they can be explored and exploited. Compare 1st generation games on any console to the last games that came out on the console.
No to my point: Games like HL2 were not made for high end cards alone. They were designed to run on DX7, DX8, and DX9 cards of all flavors. The nice DX 9 features are tacked on for the most part. HL2, FarCry, Doom 3, F.E.A.R., Stalker, and so on look pretty good, but are not designed to exploit high end features. But I think with the new consoles, with games written with the console specs as the MINIMUM baseline, we are going to see some really nice stuff. e.g. Battlefield 2 has a minimum requirement of PS 1.4, meaning GF 4 cards wont work with the game. This game is coming out in Spring, which is about the same time ATI may announce the R520. So we are looking at one of the first games to require PS 1.4 to play, yet on the HW front we are already on PS 2.0, 2.0+, and 3.0. The fact PS 3.0 HW will have been out almost a year before BF2 shows how how the PC market has the burden to support older platforms.
So I see 2 bits of good news with the new consoles.
#1- It gives me an optimistic view of how next gen games will look. It really is not fair to compare high end PC games in 2004/2005, even if they use features like PS 3.0, to console games designed to exploit these features and use them to the fullest on a closed platform. While one side of me thinks "more of the same" I think there is a lot of reasons to expect some really amazing stuff from these new systems. I think our current HW is really being under utilized and the new consoles are going to shock us by showing us how much they are not being exploited.
#2- I personally forsee the PC industry "base requirement" making big strides and equalizing with the new consoles over the next 2 years. DX7/8 will be out, and DX9 and SM 2/3 will become the bare minimum. PC Developers will know they can safely port to powerful console hardware and will have the mindset that whatever features and engines they design now can be used for the next 3 or 4 years as a starting point. But then again, I see after this transition into Longhorn things getting stagnent again until X3/PS4/N6. Just my opinion of course.
Anyhow, the new consoles are a good thing for the PC. Look at PC games like Madden 2005. It looks very much like its console versions. It is kind of silly that my computer, which is leaps and bounds more powerful than the current consoles, looks no better.
So while the new console chips from nVidia and ATI may be very similar (or not) to the PC stuff, I think we will finally get to see and appreciate the power in these chips. I have a feeling current PC software really is not giving us a good measure of how great some of this HW is. So even more of the same wont be the end of the world.