To be honest, I think it will take more than just a graphics upgrade to sell a new console. Look at the PS2 compared to the PS3 and ignore graphics for a second. The PS3 added wireless controllers out of the box, a hardrive, a full online service, game updates and console updates, proper support for big HDTVs. Last gen look pretty bad on a 42" so it was something that was needed. And a blu-ray drive. That's quite a bit of an upgrade. I'd say that the next console will need to have full 3D support. Remember that if they get released in 2014 which seems the most popular guess, they will be in use well into the 2020s. There isn't really a standard for 3DTV just yet and it's possible that once a standard is reached, it will be completely incompatable with any 3DTV released so far. I'd also say that Sony/MS are keeping a keen eye on broadband speeds with a view to an online only console. Imagine being able to download any game in an hour and play it for free for an hour then having the option to delete or buy/unlock. Imagine being able to pay to have an additional hour without buying the game. If someone at work asked you to play a game online that evening, you would never have to say that you don't own that game. You can have your free hour and, if you want, pay for an extra hour. If then you decide that you want to buy/unlock the game, you get the hour refunded. Imagine if you had the option to pay a monthly subscription and have full access to all games whenever you want. It works for Sky and it's the same thing in many ways. It's a box that goes under your TV from an entertainment company that wants your money and you also want the product.
Its already here and its called Onlive. http://www.onlive.com/