Nintendo is coming out with a new console.  Project Cafe is supposed to be more powerful than the ps3 or the 360.  Project Cafe a game yet unknown is due to release in 2012. They have also stated that it will be fully playable at E3. The controller is supposed to have a 6" touch screen that streams content from the console. It's actually supposed to be able to stream the entire games to the controller as a sort of mini tv. 
So what if somebody wants to watch TV, that won't stop you now.
I hope Nintendo makes something great with their new Project Cafe.  That way Microsoft and Sony will have to step up their game, but all there is really left to make is a console that no longer uses games.  This console would just download or stream games.  I can't think of any other improvements until they come up with 3d projection without glasses.