Next upgrade in hardware isn't necessary until bandwidth speed increases greatly in the US and Europe and 4K resolution is common. The next generation will last even longer than the current generation and won't be due for an update until UHD resolution is common.

I expect the next generation of gaming consoles in 2014-2016 and the following generation after 2030, given the current pace of technology. Consoles will be less expensive but will require more bandwidth and services which will offset the more affordable hardware.

If the next generation of consoles launch in 2014 there will be at least a year in which the current generation's titles will look as good if not better graphically than the next generation and it won't be until at least 2016 that the hardware in next generation consoles is warranted.

Computers and consoles will be more alike and compatible with each other than ever. Nearly all modern PC peripherals will be compatible with next generation consoles. All wireless devices currently being produced will be able to function with next generation consoles in some manner, rather the console simply supply an ad-hoc connection or act as a media server.

A halfway generation jump in hardware is very likely and is what the Wii-U will provide for example. A PS3.5 or Xbox 540 would not be troublesome for software developers. Beefing up the current generation enough to play all games at 1080p rather than 720p and make better use of anti-aliasing while being entirely backwards compatible with the current generation is what should've happened with the remodels (PS3 Slim and Xbox 360 S). Any game released for the PS3.5 or Xbox 540 can still be played on the current generation consoles but will play at a lower resolution with some graphic features disabled.

Software developers should be the primary influence on when next generation consoles are needed. Gamers want their new flashy consoles but there really isn't much they can offer that the current generation can't, other than improved graphics. Developers are still tapping the potential of the current generation and are full creativity, the only games that just scream for newer hardware are the annually released franchises like Call of Duty and Madden.

The next generation of consoles is exciting, and nothing is a better indication of how they will turn out than history of previous generations. Given the failure of the increasing the longevity of a generation such as the 32X, Mega-CD, Nintendo 64 Expansion Pak, etc. a half generational jump might be avoided.