Well, keep in mind that the consoles are nowhere near as powerful in terms of raw hardware as modern desktop machines...
For instance, the Wii (which was the least powerful of this current gen) has the following hardware specs (from Wikipedia):
CPU: PowerPC-based \"Broadway\" processor, made with a 90 nm SOI CMOS process, reportedly clocked at 729 MHz
GPU: ATI \"Hollywood\" GPU made with a 90 nm CMOS process, reportedly clocked at 243 MHz
88 MB main memory (24 MB \"internal\" 1T-SRAM integrated into graphics package, 64 MB \"external\" GDDR3 SDRAM)
3 MB embedded GPU texture memory and framebuffer.
The Processors\' specs:
90 nanometer process technology
Power Architecture core, specially modified for the Wii platform
IBM silicon on insulator (SOI) technology
Backward compatible with the Gekko processor
32-bit integer unit
64-bit floating-point (or 2 × 32-bit SIMD, often found under the denomination \"paired singles\")
64 KB L1 cache (32 KB instruction + 32 KB data)
256 KB L2 cache
The GPU\'s specs are here: http://en.wikipedia.org/wiki/Comparison ... processors
If you compare those specs with other AMD/ATI GPU\'s you see that it\'s not as powerful as the Radeon 1900XT cards that were common in PC\'s at that time, and are HORRIBLY outdated by today\'s PC standards.
So, yes, purely hardware wise, you should be able to make games that look at least as good as the Wii, but this assumes a lot of talent, and also depends on how much overhead there is in the OS + libraries used.... The advantages of the consoles is that they typically have a very thin layer between the game and the hardware, since they don\'t have to support general purpose use - the OS on them is tailored to run games and run them fast.