Remember when you would buy a system on the merits of ONE GAME? I know we have system sellers now (Halo, Uncharted, Zelda), but what I am referring to is a game that is so unique and inventive that you are compelled to purchase the system for that game alone. Killer Apps used to define gaming consoles long after they had been released. Soul Calibur (the first one), Mario 64, Final Fantasy VII, Grand Theft Auto III, and Metroid Prime are games that I would consider killer apps. There was nothing like them when they came out, and you could only find them on one console.
Sadly, the killer app is fading away. The big three pretty much stick to proven franchises now, and third parties, more often than not, release their games on multiple platforms. Even with system sellers like Halo and Gears, there are comparable games on other systems (Resistance and Killzone come to mind).
From a consumer point of view, without the killer App, there really is no point in having multiple consoles. However, the powers-at-be all have their own agenda. Still, it would be nice to see the big guys take a risk now and then. Nintendo is sitting on 3 phenomenal games (Xenoblade, The Last Story, Pandora’s Tower) right now with no intention of releasing them. Maybe they just want Skyward Sword to shine this holiday season. Who knows?