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PS4 won't be anywhere near as expensive as the PS3 was simply because it will use much of the same technology as the PS3. It will obviously use Blu-ray as it's media format as well as the Cell Processor since neither are anywhere near being pushed to their limits. Most of Sony's losses on the PS3 can be directly linked to the development and manufacturing of those two components. Obviously Sony won't need to develop them a second time and the prices for both are constantly decreasing every year. By the time Sony launches the PS4, both the Cell Processor and the Blu-ray drive will both be dirt cheap to manufacture. I wouldn't be surprised if Sony were financially capable of manufacturing PS4s at $400 dollars at launch and make profits similar to those of the PS1 and PS2.