The other change in the equation is in the hardware itself. Consoles have always used off-the-shelf CPU chips to power their core, but they always made their own custom graphics coprocessors to get that technological edge. These days, however, the industry graphics heavyweights ATI and NVIDIA are following the CPU manufacturers path, and delivering better parts than any other company can hope to produce themselves.
The PS3, Xbox 360, and Wii all use very slightly modified versions of standard ATI or NVIDIA graphics parts. When gaming consoles start to look like standard CPUs hooked up with standard GPUs hooked up to standard hard drives and standard DDR RAM, what s the point of spending money designing special hardware when commodity parts will perform just as well or better? And once you are using standard hardware, why not go all the way and make the platform the same for all game companies?
The PC industry has shown that economies of scale tend to make formerly expensive hardware very cheap very quickly. For the price of a PS3, you can pick up a pretty decently-specced PC these days, and this trend will only continue.