We will also get into even more of an issue with diminishing returns - the more we go on, the bigger this problem is.
Graphically speaking, and all else being equal, if the 'next gen' can't offer much that couldn't be done on current gen, then what is the point in buying the hardware??
It follows that if manufacturers 'play it safe' and release quickly (say 2012) hardware which is 'just a small update', then i don't think people will buy into it.
I see much more likely the possibility of releasing a bit later, offering technology which would be 'top-end' in, say, 2012, but only when it becomes profitable to put in consoles, whenever that is.
This way people will see more of a point in buying new consoles.
Now there is also the variable of offering 'new' things, like Nintendo did with the Wii, but that's not connected to high-end technology per se, but on the idea itself.