1. 1080p resolution displays @ 60 hz
Thanks to that TV res limit, we can expect PS4/Nextbox to max out on resolution and put more power elsewhere. Better A.I., more particles, more polygons, AA, etc. Spitting out full HD won't tax the system so the real effort will be in all the other visual splender.
2. Gaming optimized hardware and software
This has always been the case with consoles. Each generation has seen a huge leap in hardware power even though it's optimized.
3. Game budgets
This one will be interesting. Epic recently said that game budget will double for next gen. I'm not sure if I believe that. If companies are smart they will build HD libraries of resources early on. This will be costly up front but will drastically cut down the time and money needed to make games later. Why model and texture a tree eight times for eight games when you could model it photo-realisticly the first time and scale it as needed later? If publishers are smart they will make sure their developers share resources. Why pay for eight devs to model eight trees for two separate games if they are using the same engine? If you have your devs dump all their resources into one big shared library than all your devs won't have to reinvent the wheel each time they makes a new game.
4. Hardware cost
Moore's Law says that every two years technology doubles. When the Nextbox and PS4 hit technology will be about four times the power but at the same cost as when the PS360 launched. For example in 2007 the original iPhone had a 620 MHz CPU and the new 2012 iPhone 5 has a 1.3 GHz Dual Core CPU. In 2007 it cost $600 for the 8gb model and today the iPhone 5 costs 650 for the 16gb model. Inflation is also a factor. The point is that technology costs stay the same, but the power doubles every two years or so. The Nextbox and PS4 will benefit from this and release very powerful machines at about the same cost as last generation. Although I don't expect Sony to price as high as they did last time.
