Consoles are in trouble right now, with a lack of games and numerous disadvantages, it's not looking to good for the competitors. While this could just be an early life drought similar to the PS3 last generation, this ones different. More people are jumping to PC due to the reliability. By this I mean there is guaranteed past and future games. You can simply play earlier games instead of twiddling your thumbs waiting for the next AAA, and for the first time it seems like the new consoles aren't holding up to future PCs technically. Modern PCs are already out performing the consoles in a number of games. Although this is nothing new, this will become a large gap when the new hardware for PCs come out, leaving the consoles further back than before. This is why and upgradeable Steam machine could easily take the console market, allowing for PC performance and still catering to the people who prefer the console feel.
It is unlikely consoles will completely die out immediately. If it does have a possibility of happening it's going to happen slowly over time as this gap we see between reliability and technical ability widens between PC and consoles, and if this does happen maybe Nintendo will have a bit of an uprising. Due to their decision to focus on being more of a family console unlike Sony and Microsoft aiming to make their consoles more like a PC for the living room. The main argument for consoles right now are the exclusives, and that is a very worthy argument because the main thing to remember is games. Right now looking in to what the future may hold Sony has the exclusives that would make it worth while. While Microsoft has exclusives, they are nothing very unique from games you can get anywhere else. We are all also aware of Nintendo which is built upon exclusives, which is also smart on their part. The thing about this is how long would it be for those exclusives to stop being exclusives? Developers that once created console exclusives are making their games more wide spread, such as Rockstar making GTA multi-platform after the PS2, Bungie now making Destiny and Red Lynx making Trial games on most platforms with their next games. This would leave only studios owned by Sony, Microsoft, and Nintendo in the picture. But can the exclusives put out by these studios be put up against how many exclusives the PC has?
Consoles seem to be phasing out to the group labeled as "casuals" and maybe that is not the correct word but usually people get a console because it's cheap and they don't care about the best graphics. This is also looking bad for consoles considering the rise in popularity for mobile games, this could easily take the casual market away from consoles, putting them in a bad spot.
Of course this is all theoretical and I could just be diluted. Who knows what's going to happen, but it is definitely looking really good this generation to get a gaming PC.