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This is a smart move all around if you ask me.


No it isn't and no it won't happen. They will use a CELL successor. Nintendo was able to succeed with last-gen technology by completely changing the target group. Unlike Sony finds some revolutionary new input device/whatever. They do not have the luxury and still need to compete on the high end with Microsoft.
We shouldn't forget that the HD market is as big as the Wii market and it sells far more games at higher prices. So Sony would be stupid to concede this to MS.
Using an upgraded CELL could be just as backwards compatible.