I don't know whether a fourth machine could enter the race. I just don't think it's possible these days, what with the huge developmental costs, if it fails the company is most likely going to go bankrupt. Microsoft were able to bankrole their console because they've got pretty much unilimited funds and were able to get some good developers on board.
Microsoft will be around in the console wars for quite a while and will survive in the marketplace because they have a lot of first party support. They have their own software companies that are churning out hugely popular games like Halo, Gears of War and Lost Odyssey. They have a lot of licences for exclusives like Mass Effect & Bioshock because they can afford to pay these companies and make it worth their while to release it on their console only. I wouldn't be surprised to see them snapping up a lot more, I wouldn't put it past them to make GTA a Microsoft only game down the line by offering them a huge down payment to release it exclusively.
Nintendo is the same, they've got a long history and their devoted fans wiill always go with the new console. Plus they were smart and knew they'd never be able to compete with Microsoft and Sony in the same way and went in a totally different direction.
Sony had it with the PS and PS2 with games like MGS, GTA etc but it seems they're losing the support they had. GTA will be released for the 360, Assassins Creed was intended to be a PS3 exclusive but will also now be released on the 360. There have even been rumblings that MGS4 could get a 360 release because Konami are worried about the spiralling costs of the game and don't feel that it would make it's money back being released on the one console and are putting pressure on Kojima.
It's a worry, but the only one I see dropping out is Sony because they are losing a lot of exclusives that really sell their system. It'll be interesting to see how well the PS3 truly does because they've pretty much got their whole company riding on it. If it fails, Blu-Ray will most likely fail as well.