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Sony will take a similar approach to the PS4 like they took with the PS Vita. So yeah, expect them to go guns blazing next gen, but with cheaper hardware. Rumor already has it that they are using AMD chips this time around, and blu-ray is obviously cheaper now, so overall it's going to be nowhere as costly as PS3 was.

There is still a good chance MS might have a stronger hardware on their hands this time around, but the leap from PS3 to PS4 will be generational leap no doubt.