Graphics wars == irrelevant.
The console market isn't self-correcting. It's a vicious cycle. The console that pulls ahead gets more developers, which means more people buy the console, which means more developers develop for that console....et cetera. Nobody's going to spend the GDP of Kenya's worth of money on a lavishly-FMVed PS3 game in two years if the Wii's userbase is so much larger than the PS3's, for example.
I mean, you could tell the end was near once Sony's reps started saying stuff like 'people aren't comparing it to computers or consoles, they're comparing it to PLAYSTATION' and 'the name is capitalized because PLAYSTATION is so fundamentally different from everything else'.