Here's what John Carmack said about the future of gaming during an interview with DS.IGN:
IGN: What's the next big step for games - where you see it moving over the next five to ten years, both in terms of technology and platforms?
Carmack: I do think that mobile platforms will play an increasingly important role. There are vastly more mobile phones in the world than there are game consoles, the hardware capabilities are now quite strong, and connectivity is intrinsic. There is still a large issue with poor user input characteristics and widely scattered implementation quality, but I am hopeful that will be improving over the next few years.
Ten years is a long time to look ahead for hardware trends. Some things will not have changed drastically -- the HDTV resolutions will probably be the same, and game consoles and controllers will still be recognizable. Processing will likely be done with hundreds of parallel processing units with a flexible division of work. Content delivery will mostly be over the internet, likely in a dynamic streaming style rather than a one-big-download style. Networking could even displace local computation for high end rendering, with cheaper devices essentially streaming media created at locations of higher compute density. I don't think it is inevitable in this timeframe, but significant advances in IO would make the largest difference -- direct retinal image scanning, high resolution full body input, etc.