I remember in a thread here about gaming I brought this subject up and it was met with some skepticism and doubt by a few posters - the idea that console gaming as we know it today is not sustainable into the future and it will not be around like it is today for a whole lot longer. Wired have a piece up which touches on this:
tl;dr Handheld technology will, soon enough, encroach onto the market that makes console gaming so powerful (the casual consumer). Keep in mind just because we're talking handheld doesn't mean it's about gaming on a tiny screen - the article touches on needing stuff like wireless HD video standards to emerge, which has already started. It's only a matter of time before every TV/monitor sold can easily sync with every handheld device sold.
The way I see it, console gaming has problems on a few fronts - mostly hardware related. Firstly, it thrives in a market which, while loyal to the concept now, is supported by the same type of people who would fairly easily be persuaded into whatever form of gaming offers the best overall package. What does console gaming offer going forward that a 2020-2025 high end handheld device won't be able to? This is a serious question, and if your answer is anything to do with hardware and graphics, you are on an increasingly weakening branch going forward. Even if, in 2025, console hardware can still eclipse handheld hardware at the same pace it does today, it doesn't really matter - if console gamers today cared so much for hardware they'd be PC gamers. All handheld has to do is offer good enough hardware for the expectations at the time to be met, and it is closing the gap.
Secondly, even with good hardware on release day, consoles are lethargic in a fast moving hardware world. How long can Sony and MS and Nintendo really get away with these dragging release cycles, of which the latter half if not more is embarrassing from a hardware capability perspective? If these custom built single purpose machines can't start moving towards a 18 month cycle at the latest, then it is a problem. Too expensive? then they're not a good business model. People won't buy them every 18 months? Why? they commonly buy a new phone every 18 months and these can cost 2-3x more.
Lastly, even if consoles piggyback off of PC hardware going forward and tighten their release schedules, the fact is even the consumer PC market is not moving as quickly in some regards as the handheld hardware market. Intel want to make a 48 core handheld CPU:
Now, more cores doesn't mean more performance at a 1:1 ratio, but it's clear where the chip giants are focusing their attention over the next 10-15 years, and it isn't at custom expensive processors for Sony's latest Playstation. And even if consoles start adopting the handheld technology for its hardware, why would anyone buy an extra ugly box for the living room when the phone/tablet/whatever they already own can already sync with their TV and control pad via wireless, and play the latest games in HD?