Yeah, technologically. But what good is a bleeding edge processor if you're just going to use it to render painfully-realistic reproductions of dismal post-apocalyptic war scenes? And run games with no actual content appeal aside from high res textures and snazzy lighting effects?
Just one look at Super Mario Galaxy will tell you that the artistry in the visuals, and creativity in the gameplay design are equally as important as the hardware. That's where I think Nintendo really has an edge.
I'm almost inclined to think that the newest technology is deteriorating games. With the processing capability that current-gen systems have, developers that want their games to look the best have to spend all of their budget on graphics engines.
Although, one shouldn't take my rant too seriously, as I have played neither an Xbox 360 nor a PS3.