But surely we diehard gamers who are extremely into technology and online gaming have strong internet connections? :P If Sony releases a moderate PS4 and introduces cloud streaming, yeah people with bad internet will be left out of the streaming, but at least they'll have the new console with upgraded tech.

I didnt mean it like that. Yes, you're right, they can't just go and copy what's successful and expect results. That's obviously not what they're doing. I only suggested that the WiiU and the Wii did in fact have an effect on their strategy. The whole financial mess from last gen probably had a lot to do with it too.

Wii U had no effect on MS/Sony.

I am now hoping that Sony will release a lower spec console while MS releases a powerhouse. MS can take some losses with no problem and it just might lead to huge victory. Mmmm.. Imagine, a 70% marketshare MS console. That would be so sweet.

I hope at least either Microsoft or Sony have an extremely powerull system and right now my preference is sony as I think they're 1st parties will do more with the added power. Is 4x8GB (32GB) Ram asking for too much? :D

Imo it's a combination of several things, the first being that financially Sony can't really afford another hardware loss bruising again next gen, the amount of money they've lost not just because of gaming pretty much indicates a conservative approach. The U imo is partly a reason as Nintendo are smart enough to see their competitors are trying to recover from their losses so have opted to go full drive to force the issue with them, the U may not be a super computer but I'm certain it will easily be a good leap over this gen and more powerful then what some people initially realize due to Nintendo wanting to capitalize on their position as market leader. MS and Sony can't allow the U to sell unchallenged and build up a userbase with no hassle, generation fatigue will set in at some point for this gen and people will begin looking to make a jump into the next gen.

To try and oust the market leader using brute force and specs is a risky option in itself because not only are you raising you production costs and costs of development but if people still stick with the market leader's brand you're in trouble. I think Vita has also had an influence here as it's costing Sony money while being dismantled by the competition.

I don't think that's a reliable option at least for now. Most people don't have the enough internet speed for an optimal cloud gaming experience, maybe it could work in some places of the U.S, Europe and Japan, but what about the rest of the world. Those countries represent a nice portion of the market which obviously all companies want to gather. Maybe Sony want to make the system future proof with cloud gaming, but in the first couple of years it will be almost pointless imo. 

To the OP's question: I don't believe Nintendo's move "forced" Sony to lowball the PS4. I think there were far more market pressures on Sony that forced them to lowball PS4. Nintendo just foresaw this outcome and planned accordingly.

Was that article written by a child? Do they really think the PS4 prototype was cobbled together in the short period after the Wii U's price was announced?

No, if dev kits are out, then the direction was decided on long ago. What I'm hoping for from Sony is a traditional gaming console, just like the PS3. This will allow them to pack the most value into the internal components without spending a disproportionate amount on peripherals.

Everyone is expecting Microsoft to go beast in terms of power, but I'm not so sure, not if Kinect 2.0 is integrated or offered in bundles at launch. That would make the 720 really expensive, and as Xbox is the weakest brand of the three, I think it's important for Microsoft to have a really solid launch year.

Also, we've always known that there won't be a huge visual leap. It's not going to be like previous generations. The real advancements will be in terms of gameplay and AI.

The only thing forced right now is the Wii U itself.

1. The rumored PS4 specs are actually much more powerful than the Wii U. We don't know specifics but I'd say at best 3x the power.
2. If Sony really plans to have the PS4 run games at 1080p, 60FPS in 3D, then something is missing from these rumors. The APU alone won't achieve that. It needs a dedicated graphics card as well.
3. Rumors mention a "very affordable console" that "isn't a slouch". I think this person is paying a little too much attention to the "affordable" part. By affordable I doubt they mean $300. They just mean "no more $599".