Dont think Ms and Sony are holding the industry back - they are predictably releasing new consoles / games as they always have with mor powewrful consoles and better looking, bigger games and 1 year ago that would have been okay for me.
Since getting the Wii - that bores me now and the Wiimote has ruined FPS with the control pad for me, I also predict it will for driving games also once a decent effort comes along. Nintendo has pushed the console and the handheld market and blown it wide open in my opinion and turned it on it's head with state of the art / massive hig budget producted games looking old and tired for me now - it's all about the gameplay and innovation. This is where smaller dev companies where the devs get a lot of freedom of though will flourish, the Wii was aimed with them in mind and Pollen sonata looks to the be the first game that'll demonstrate this.
No More Heroes, Opoona, REUC, Ghost Squad, Red Steel 2 (it'll come - and it'll be fantastic), Tiger Woods 08, Maddens 08, Zak and whatever it's called quest for barbaros treasure, Pollen sonata, Spore, My sims (not my type of games but this'll be huge).
The third party support will be there for the second release of Wii Games and they're getting better every release schedue that passes. (RE4, Harry Potter, Dragon Quest, Dragon Arms, Sims Pets, Trauma Centre on this release schedule )