Ian Sane: I think your right about the goals of Sony and Microsoft, but I think those goals CAN lead to longer life cycles...but probably not this generation.
Both companies will have longer and better penetration if they can get their product powerful and useful enough to last the same amount of time you would keep a DVD player, or a television. The game console can't be a temporary device that must be replaced every 5 years to stay current. It must evolve into something with more substance and staying power, then more people will view it as a useful media device instead of just a game console. {edit}
Sony has actually placed itself in good shape to go 10 years or so with the Blue-Ray Movies. The Playstation 3 can be your primary device to watch these new movies and play games.
Microsoft doesn't have that luxury as it is still primarily a game system, and little more. Next generation I expect Microsoft to create a more perminate media device.
Nintendo is interesting. I don't think they consider themselves a technology company, but an entertainment company. It is very different market. With entertainment your goal is to provide new experiences and means to have fun, not just through technology advances, but through new experiences. The Gameboy Micro is an extension of that philosophy. It is OLD technology, but it is a new experience, because now the Gameboy is truly, portable...it is now completely viable ot have your Gameboy on you at all times.
The Revolution could catch on and Nintendo will allow it to exist for years if the market for the experience is good. However, they will move to make a new console when the next new fun experience can be developed. It may be an evolution of the Revolutions control device or something entirely new.