You're right that no new AAA games will start development after the PS4 is out, but I would expect lower to mid tier gaming to continue for a few years. Sega was still publishing new Dreamcast games up until 2006. Good ones too.
Sega manufactured games that late, but they didn't publish them. (Admittedly, they did
continue publishing DC games - only in Japan - through 2004, which is still quite a while after the system was retired. The fact that most of those were easy ports from Sega's Dreamcast-plus-RAM arcade hardware is what made that happen, though; something which doesn't exist for PS3 or 360.)