"In a 26 minute presentation at GDC - available now as a voice over'd slideshow - Ben Cousins who heads mobile/tablet game maker ngmoco, uses some rather convincing statistics of electronic and gaming purchases along with market shares of developers and publishers from just a few years ago, that when compared with today, displays some surprising results. The old guard, including the three big console manufacturers - Sony, Nintendo and Microsoft - are losing out massively, compared with the new generation of gaming platform developers, Facebook, Apple and Google."
The rise of casual gaming certainly has had an impact on console gaming, but like the PC, I do not think that consoles are completely gone. Gaming at mobiles and social sites has certainly opened up the market to more people, and mobile phones have certainly improved in graphics capabilities, but consoles still retain the edge, as do a certain segment of PCs. The challenge that I see with consoles is that mobiles tend to have a much shorter development cycle. Instead of the 5 to 10 year cycle that consoles have enjoyed over the past, mobiles are getting faster almost every day, and people tend to switch up their phones much more frequently. That means that mobiles will probably catch up to consoles in the coming future, at least for a casual observer or gamer, though more serious gamers will try and demonstrate the greater depth and complexity of consoles.
Consoles also face the challenge of "smart" TVs, which are also growing in capabilities. That is probably why you see consoles working hard to push their online channels such as Xbox Live Arcade. Ultimately, the console market will probably plateau, but you will find games with much more cross platform integration, with you being able to play some parts of a game on your phone, some on your console, and some through a standard web browser.