Every time a new set of console systems are presented to public, the press starts talking about "new gen \ next gen". Even when the only evolution from the previous "gen" is a faster core processor.
So, if I got it right, we must be at least at the 7th or 8th generation of home video-game systems.
...
Or not!
...
Every month there's a dozen of new cellphones on the market, each one more powerful than the other. But that doesn't mean that every new cellphone represents a new generation. In fact, we're only at the 3rd gen of mobile communications.
Generations are differentiated by their main characteristics. So, we should talk about new generations only when there's a major evolution from the previous one.

I consider we are at the end of the 2nd generation of console systems.

All began when Atari took Pong into our houses. After that each following system received sleight improvements - more colors, smaller pixels, better sound, etc... - but the basis were the same.
If you grew up in the 80's you remember that games with 2D cartoonish presentation and synthesized sounds.
Some games were revolutionary by using primitive 3D renders such as Star Wars (1983). But even those games could not break the line.
Then came the 90's and something was about to happen.
Atari Jaguar and 3DO were the warning. Sony Playstation and Sega Saturn the revolution!
Fully 3D graphics, multiple high quality audio chanels, full motion video presentations. The CD-ROM allowed bigger games and what followed you already know.
This was the start of the 2nd generation of home consoles.

The new millennium brought Sony PS2. It was faster than PSOne. Could read DVD and had network connection. But just as Mega Drive was to Master System and NES to SNES, it was an upgrade with nothing really new.

Now I sense some big changes going on.
Nintendo Wii motion control and Sony developments on the 3D experience can start a new revolution on the game industry.
I don't consider Wii and PS3 a truly new generation, but are certainly something in between. Perhaps a 2.5 gen.

I think the "next gen" (the 3rd generation according to my opinion), will change entirely the way we play games. But lets wait to see which surprises are they preparing...

...I wonder why I didn't mentioned Microsoft.