Sony actually really needs to "pull a nintendo" and NOT focus on specs. As was pointed out, and as I have been saying for a while, they cannot afford another arms race with MS. MS will destroy them if it comes to a loss leading model.

Sony really needs to make a profit on their consoles, or at least break even. MS CAN afford to take a loss. So sony will need to:

Delay a year to let manufacturing costs come down

or

Make the system attractive with something other than horsepower and first party titles (vita integration is NOT the answer)

They need a "gimmick" like the wii, wii u and Kinect. Something not available to other consoles.

Or they need a ton of 3rd party exclusive, which just isn't going to happen.

Microsoft will be the hands down leader of graphics this coming gen, and unless Sony delays quite a while the disparity between PS4 and WiiU will probably be easily surmountable for porting (though I think it will be anyway)

While the WiiU might only be 2 or 3 times more powerful than a PS3 (allowing the PS3 to get scaled down versions of WiiU games), and the PS4 with the small jump that the OP is suggesting could again be only 2 or 3 times more powerful than a WiiU (again allowing it to get dumbed down ports of PS4 games), that still  would make it as much as 9 times more powerful than a PS3 (PS4= 3xWiiU=3xPS3 => PS4=3x3xPS3=9xPS3).

It doesn't look as a minor increase to me.

Honestly, I used to be a sucker for graphics. Back in 06, i paid 599.99$ for the PS3 60GB bundle (PS2 compatible) and now looking back, such a horrible idea. I will never pay that much again, especially in this economy. Wii U offers me HD graphics, a choice between either Nintendo Gamepad for 1st party games or Pro Controller for ports - the best of both worlds and for 349.99$. Nintendo is the clear winner for 8th gen - it will attract alot of families and casual players especially with the gamepad and tvii features. If I were Sony and Microsoft, I'd be scared, especially if the consoles are more expensive and take a loss on them. Sony should not launch a new system anytime soon especially with their financials, PS3 has another 2 years in my opinion and should concentrate on that.

I see big publishers as Activision, Ubisoft and EA supporting the console.

Also, Wii want to talk with you (A lot less powerful, no "big" third party games, supported by the right Nintendo games, winner fo the generation).

I dont think Sony more M$ really need to rush to release new systems, in fact, i think they can wait as long as they want. The problem is whoever releases last will have a huge uphill battle to climb so I think Sony and M$ are going to get their next consoles out as soon as possible...its no so much that the PS3/360 are becoming obsolete, its more that the longer they wait, the more difficult next gen will be IMO

Microsoft is in the best position to come out ahead next gen. Especially if they're able to launch with $299 and $399 pricing, Kinect 2.0, the most 3rd party support, big exclusives, an improved Xbox LIve, a native 1080p @60fps standard for all games, and solid physical gaming media (my biggest hope).

Sony is in the worst position out of the 3 by far. They can only lower the price of PS3 so much, and they don't have the funds that Nintendo and Microsoft have. Compared to a base unit costing $249-269, they'll have to release the PS4 with at least a $499 price tag and a loss. Sony may not survive this next generation, since there's really no market left for such expensive gaming machines.

Nintendo will do fine, and I feel that they will be neck and neck with the new Xbox console this time around. They'll continue to offer unique gameplay and IPs, so they're only obstacle will be pricing this time around. It's a very different economy than when Wii was launched, and people may not be willing to spend as much for that kind of tech.

I wish a new company were joining the console wars to bring a new and fresh face to the hardware scene. All 3 companies seem to be going through the motions, and not able to surprise anyone anymore.

I won't be able to. Just as others said right about you, just because the tech isn'to 10x more powerful doesn't mean the feature set isn't.

Once Retro or a 3rd party or a 3D Nintendo game are released and built using Wii U to a great extent you'll see it trounce anything on PS360. So far all you have are 3rd party ports that were built with last gen features.

PS4 doesn't _need_ the same leap that the PS3 was over the PS2. The PS3 was high power, low memory, blu-ray, and before its time. PS4 can merely be a mid size bump in CPU/GPU performance, double or quad more memory, same blu-ray, and pretty much everything else the PS3 already has and it would be a perfectly legit, more powerful than the WiiU, product. I daresay they could do it and it could be only $100 more expensive than the current super slim PS3.

This is flawed thinking in my opinion.

Yes I agree with the OP in terms of graphics only. But the next generation will not be about graphics. Even if MS/Sony produced the highest end console possible the graphical difference to the WiiU would not be appreciated by the casual observer.

However, power can be - and must be - used for so much more than mere graphics.

First off, there's the ability to process. Look at Dead Rising on 360 compared to Wii. Hundreds of concurrent zombies compared to a dozen. Similarly the more powerful PS4/720 would be able to produce effects WiiU can't.

Secondly look at what WiiU is doing with it's process power - it's splitting it between 2 screens. What could MS/Sony do with more powerful machines? We know about Smart glass, so MS could use that to enable multiple screens similar to WiiU for local multiplayer but not limited to two. Sony could copy WiiU's design but allow all players to have their own touch screen and own images.

Kinect 2 will be far more processor intensive than Kinect and far more precise. We've seen lots of interesting patents from MS recently, all of which will require a lot of power to drive. In the end though it allows gameplay not possible on other systems, and that's key.

Apple devices are growing in power each year. iPhone 5 is already roughly equal to Vita, next year they could match current gen systems (and maybe WiiU) and only go up from there. Apple / Android devices are now the device of choice for casual players. So home consoles need to provide an experience they can't possibly match to attract that crowd back. This is my beef with WiiU. Nintendo went the wrong f---ing way. They are trying to outdo Apple and will get crushed. MS seems to have the right idea, and Valve looks to be following suit (no pun intented) with wearable tech. Power is needed for this. I fully expect MS to produce a very powerful machine but subsidize the price with it's 2-3 year contracts so it's still mass market affordable.

For MS this all makes sense. PCs are dying (sorry PC gamers). MS sees a day where we all wear our PCs on us 24/7 and are working towards that (and owning it). Whatever they spend, and even lose, on 720 will be worth it if it still helps subsidize the tech development of the future. If it helps put them in pole position in tomorrows tech.

Sony also needs and wants that, but so far, has shown an incredible lack of vision beyond 'bigger, better, more powerful'. The OP is right. If they follow that mantra with PS4 they will likely write their own death sentence. They need to truly distinquish themselves from the competition and be a device everyone must have. Or, just embed PS3 into every Smart TV, phone, etc they make, using the PS brand as added value. Gaikai will allow that even for lower tech devices as long as they have wifi. In this case, PS and WiiU would share comparible stats and have the same games but MS would get upports of those games. An upport may not be nearly as impressive as a game designed for the superior tech, but it'll still be superior and will win a larger portion of the core away from Sony.

However, it's too early to determine Sony's strategy but all other things being equal, they'll do what they've always done - increase power. As for MS, I fully expect them to launch a much more powerful machine, and utilize that power in all sorts of interesting ways WiiU (and possibly PS4) can't match.

Regardless of whether Sony and Microsoft push technology in the next generation, I think Nintendo has a solid opportunity to "win" the generation ...

If I were to estimate what the level of interest is in the Wii U I would say, with all else being equal, it would be about 50% higher than what the 3DS had heading into its launch. While that can hardly be called amazing, I think it is a solid level of sales that will allow Nintendo to execute their strategy quite well.

I could be wrong but I suspect that the Wii U is designed to get users to evangelize their friends and families to buy the system and games through social gaming and gaming focused social networking. Unlike Sony and Microsoft who are focused on making competitive online gaming experience that allow you to find strangers to play with, Nintendo seems to be focused on producing a social experience for people to interact with people they know in real life.

This strategy is not that strong on day 1 because no one owns the system to peer-pressure you into buying the system, but with strong enough sales the userbase will grow and people will be more interested in buying the system due to personal experiences with it and desire for social interaction.