Visuals on par with today's CGI, Avatar like visuals, at the minimum, they (sony/microsoft) would be smart to take a near generational advantage over nintendo once again visually, and improve on user interface/price/motion/innovations that could push consoles....
I've said PS4 would release in april of 2014, and I will continue to say that (tis was mon prediction in 2007), Wii U if it stays as it is hardware wise, would help keep PS3/360 on the market for a couple of more years, unless microsoft decides release Xbox "next" late next year or 2013..
atm though, consoles are "almost" perfect, visuals don't really need to be upgraded much, but knowing how sony jumped a gen with PSvita, from PSP, they'd do the same with PS4 over PS3.... not sure about microsoft, but since crytek is on them, it should at least be ahead of Wiiu, and maybe a gen ahead of 360, which would be ideal for them
Sony would be smart to stick with blu ray, since it's starting to take off, by 2014, the format should be the main "physical" format for media, it would also be cost efficient, and allow them to launch a $399 console with visuals on par with things like AVATAR in 2014, but that's if they decide to take a jump like PS3 did with PS2...
(realize when 360 launched, it was the most powerful gaming hardware on the market, including PC for a bit, which was impressive, console launched at $399/$499)
