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Moves Sony should make --

Forget about the standalone Vita being a success. Accept that it's a niche product. Make a "real" Playstation Phone. Vita chipset, 4.5 inch touchscreen, slider design (ala PSP Go but better analogs), Android OS. Make a tablet model as well.

$19.99-$29.99 games via digital download, ditch the retail market and $40 games, it's never going to fly.

PS4, fall 2012 launch, sensible design. $349.99 and $399.99 SKUs. GPU should be comparable to a 7850 Pitcarin, which should easily be 7-8x+ better than a PS4. 2GB GDDR, throw in some cheap 2GB DDR3 too. System should not be bigger than the PS3 Slim (2009 version).

New controller this time -- split-apart "Move" controller that works with a HD PSEye. Move had potential, but was not exploited properly on the PS3, need to have one in every PS4 box. It can work as a traditional controller too, but breaks apart to be like two Move controllers (one for each hand).