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Gamerace said:
This is all well and good and I look forward to their reveal but what is Sony's recent obsession with power? PS1 & 2 were not the most powerful but they did amazingly well. PS3/Vita were and look where that got them. Last place and huge losses. Gaming history has shown the most powerful system has never ever won any generation either handheld or home and usually leads to big losses (Xbox, PS3). Sony is not even in a position to be playing this type of game anymore.
If they allow MS to undercut them on price with similar specs they'll have lost another generation. Why Sony? Why?

The PS3 was so expensive because they were using brand new technology with the Cell processor and Blu-Ray, not simply because it was a powerful system.  The PS4 is expected to have much cheaper components that are closer to off-the-shelf, existing components.  That's a much different scenario.

The 720 isn't expected to be cheaper, or much cheaper, because a lot of people believe it will ship with some form of Kinect or other technology.