The PS2 is still alive, with sony publishing first party games, and outselling the Xbox 360 (as of January 2007). It was launched in Japan in 1999, so it's creeping up on 8 years.
2012 for the next Xbox will mean Microsoft has done a good job. The thing is, at this point system power is not a selling point compared with system functionality. Console manufacturers have a distinct advantage in extending system lifetime because of the online upgradability built-in. Eventually they will need new GPUs but not before they've exhausted adding a lot of functionality on top of the current tech. It's way cheaper and more appealing than a whole new hardware launch nightmare.