Basically, Smart TVs do a lot of the things that Sony and MS are planning for their next consoles, and people may be reluctant to purchase additional equipment to do what their TVs already do. It's an interesting postulation, but it remains to be seen how true it may be.
The funny thing there, is that it kind of feels organic in how it fits into over-arching patterns.
Nintendo discovers a 'blue ocean' of people who haven't had gaming pitched at them with the Wii, but potentially loses much of that new audience to smartphones and tablets because mainstream people want devices that also happen to bring the blue ocean gaming as a bonus.
Sony and MS invest in making the dream of game console as ultimate set top box a reality, and find an audience that does want to be able to stream television, movies, and music from the living room. Only to get disrupted by the fact that everyone's television will soon do that anyway as a free bonus.
A huge potential caveat there though: this may indeed be an inevitable future, but it may not affect the next (8th) generation of game consoles. Everyone just finished upgrading to 1080p HD TVs over the last five years. The average consumer may not have a Smart TV until another five years have passes and they replace their current HD set as a matter of course.
So Sony and MS may catch a break there, and media convergence on their 8th generation boxes may remain a huge selling point. After that however, the future could be seriously contested if/when Smart TV becomes commonplace.
I suppose, while tossing stuff out there, Nintendo might still benefit if they manage to get Japan on their side for the 8th cycle and allow Japanese game development to have a stable home with stable budget ranges, etc. Making a stronger Japan by the time the 8th generation ends, and the industry is forced to go looking for where all the games went.
