The problem is the "Wii model" isn't really a model per se. It's not something you can just apply and gain success. It went beyond pricing competitively. The GameCube and XBOX were priced relatively competitively too, I believe.
The Wii took off in everyone's astonishment because it was disruptive. It charted a blue ocean.
There is no guarantee that the Upad for example will follow suit, for one thing, especially when the ocean is red with iPads. While Sony don't have anything we know of to serve as suitable hook. Microsoft, however, may use Kinect, but they somewhat played that hand this generation already.
I understand that, but we've seen at separate times in this industry that within a single generation divergent paths begin to emerge that are key to success in the next cycle. Last cycle in the Japanese industry for example we saw a general push in the direction of handhelds, codified in a way by the overwhelming success of the DS and PSP markets in comparison to their console counterparts.
In the mid point of last gen on the console there was a split push. The hardcore oriented market has been there pushing tech advancement from the start. They got a huge push this past generation. Regardless that you could get a powerful PC with double and sometimes close to triple the RAM of either system, they were powerful.
That other was in alternate ways to play. Sony was actually key in showing that the market existed with the EyeToy. Nintendo was just the smart one to push for them outright.
At the tail end of this generation, we come to a fairly linear path. The push for more will always be there. Half the time they don't even realize they're getting a good deal until it's exploited to its full potential. And then there's the full blown necessity to control the already large costs of development.
It's true that consoles must find a way to stand out as gaming platforms. There are literally dozens of other ways to play games. I just disagree with the average gamer that the difference has to be on the basis of visual. I can guarantee if consoles try to fight that battle they will lose, and spectacularly.
Saying that, they don't have to cede the push for more. But console cases are a limiting factor in how hot these things can run. Microsoft dealt for half a generation with the money draining potential of a design flaw.
The one point I will cede myself. I think I'm beginning to agree that the console industry is about as much about "How connected am I?" as it is with almost anything. The old school gamer in me holds out hope that it is still "What am I playing?" that controls it, but occasionally you must give ground.