I don't agree that consoles will fade away - I think that they won't make jumps in technology we got used to with the past few generations.
Plus hardware and software manufactures are going to learn the hard way what Nintendo has already figured out. Yes more power, better graphics, and high end machines are awesome and there will always be an audience for that (myself included) but the majority of consumers are more than happy to buy a less powered machine for around $200-300 so long as their are tons of games and new innovative ways to play. Consoles are still selling. Games are still selling.