Yes, I might be the most powerful - but that isn't saying much. It won't be such a huge leap that WiiU won't be able to keep up. I'm expecting WiiU to be the weakest of all 3 - kinda like PS1 or PS2 - but not as weak as Wii was to PS360. And I think it's far more likely that x3ox will be the most powerful console next gen.

well why didn't you say so! ^^

I think the part most people fail to take into consideration, is can many developers (apart from the likes of Activision and EA) afford to pump out games for a much more cutting edge system? So many devs already sinking and/or switching to mobile development. I don't think developers are going to be able to afford to make the games that the graphics whores are demanding.

Both Sony and Ms will have high end devices, they already have dev kits around.

Yes, a very good point indeed!! Dev costs are high enough as it is, and games needs to sell a hell of a lot just to break even. Didn't Bayonetta sell like 2m and barely broke even?? So why make a beastly console if devs are unwilling to use all that power?

I am gonna respond directly to the OP, even though I realise this thread is old.

You base the whole thread on the notion of exchange rates and costs, so I think there are two points that invalidate this theory.

1. The fact that the yen is so high means less income per unit, yes. But at the same time it means cheaper imports. Since it seems like the PS4 will be made with off the shelf PC components from outside of Japan they will save as much percentage-wise as they will lose when selling the unit. It won't be manufactured in Japan either.

2. Much of what made PS3 so expensive was the exotic technology. Blu ray and Cell must have represented over half the cost. That problem should be gone.

I think Sony will avoid taking too much of a loss this time, but they can (and probably will) still make a much more powerful console than ghe WiiU. Not saying that Nintendo won't win the gen again though, it may well happen.

Yes, when I made this prediction we hadn't heard the rumor that it would be manufactured elsewhere, so you might very well be right that it won't be too expansive to make.

I'm still on the fence whether or not it'll be much more powerful than Wii U; it's the only way Sony can go really. They can't make a cheap console on par with Wii U, because then, they'll receive the same ports of equal quality, and considering Nintendo has Nintendo games PS4 would be screwed. But I don't think they can go toe to toe with MS either; MS has waaay too much money to let Sony be the most powerful console next gen. So Sony is in a pickle right now. I'm most interested in seeing Sony next gen, because they're right in between Nintendo and MS.... Which way will they go?

Well I can agree with that, I think it will fall in between WiiU and Xbox8, though I think it will be closer to the latter in power. Just based on rumours and gut feeling of course. We don't even know how powerful WiiU really is, let alone the other consoles, so we'll have to wait and see. 

Two things that are not being taken into consideration by most people are energy consumption and cost ...

The Wii U draws over twice as much power as the Wii did while running New Super Mario U and may draw more power than that on graphically demanding games; and the Wii U sells for $350 while taking a small loss while the Wii sold for $250 while turning a modest profit. While the Wii U controller costs more than a Wiimote + Nunchuck, it is reasonable to assume that the Wii U system probably costs about 50% more to manufacture than the Wii system.

There are usually diminishing returns in increasing cost and energy consumption to increase processing power, so to maintain their processing power advantage you would expect greater relative increases in energy consumption and cost on the PS4 and XBox 720. Although I could be wrong, I would expect to maintain the same relative processing power advantage Sony and Microsoft would need to launch $500+ systems that used more than 300 Watts ... something I doubt would be popular

While I didn't understand too much of that, you always bring up good points, so I'm just gonna go a head and agree with you right away.