Well then, I guess that my POV regarding consoles and SOC is: PLEASE DON'T!
Current consoles are already a limiting factor, the low low common denominator and their hardware was mostly top notch when it was released. If they start conceeding performance even more in order to fit it in one package, stagnation in games is a sure thing (more so than this generation == THE HORROR). Yeah by the time they release next gen consoles, AMD and maybe Intel will probably be able to fit a octo-core Bulldozer/Sandy Bridge and the equivalent of a Cayman on a single die, but by that time mainstream PC gamers will be using PCs twice as fast, not to mention enthusiasts. Come on guys current APUs while an improvement over previous integrated graphics are only barely faster than R600 was 5 years ago FFS! Even if they double the performance every year (which I doubt considering current cycles) that will still leave us with Barts kind of performance for when they are released in around 2014. That seems good right now, but in 2 years Barts' kind of performance will be completely outdated or so I hope. For sure I don't want to suffer another 5 years getting subpar console ports. At least DX11 brings in tesselation which can be used to improve quality without having to worry about scaling between different platforms.
^^ That's one of the reasons I want them to focus on geometry, because they can create the games with console hardware in mind, then by just upping the tess factor and using higher detail/resolution height maps, we get more detail with little effort from developers. For the same reason I want large scale physics to be used and one day raytracing or some kind of photon based lighting. What all these 3 techs have in common is that they are very independent techniques that require very little tweaking from artists. With those elements the game engine would behave like the real world does and they would not need to care about things like how many lights are affecting a certain place, how many shadow maps are going to be created and many other things. They would just have to care about putting light sources where they should be, tell which material a certain object is made from etc. and let the engine and config file dictate which LOD level is used, and how the objects are going to behave, look and break, between other things.
@crazyeyes
Most developers create very high poly models in order to create bump textures (or they outsource the creation to 3rd parties), they can use them to create displacement maps. You are right in that they are not using tesselation the way it should be used and most of them are just using it to round edges, normally not even caring about if they are tesselating flat surfaces too much while areas that require far more polys are left with a very poor number of them. On this, Heaven bench is probably the worst, because (at least IMO) the stairs, the dragon and pretty much all the buildings and rocks need much much more tesselation to even start looking good. On the other hand the ship has far too many polys in some areas. For me in overall Heaven looks like crap, because it attempts to use tesselation+displacement but falls very very short, even on extreme settings, leaving hard and pointy edges, textures that have been stretched too much and something similar to high frequency artifacts on the geometry as you move around. I don't know about Ati demos because I don't own an Ati card, but Nvidia ones certainly do a much better job than Heaven, both on quality and performance. Especially the island11 tesselation demo.
The thing about Ati cards and Nvidia cards being almost as fast on some games/benches using tesselation is because tesselation is not really being used as much as it could. The island11 tesselation demo can show as many as 25 milion triangles (yes thats far more than pixels onscreen) per frame at acceptable framerates (GTX570/580) and the absolute maximum without using adaptative tesselation or culling is 160 million. My GTX460 for example can handle around 500 Mtriangles sustained per second, and it does around 20 fps with a 25 Mtriangle scene and 4 fps at the maximum of 160 M triangles*. Heaven, Stonegiant, and others are nowhere near that mark, my estimation is that they use a maximum of 2 M triangles.
*For reference the demo does 75 fps when tesselation is at minimum, and then the scene has around 50k polys. So although it might not be the best optimized of demos, extreme level of tesselation comes very cheap.