I have a feeling Nintendo is already secretly hard at work on a new console that will be able to compete on a graphical front next gen. This may just be wishful thinking, but I think it would be feasible: If they hammered down a design now, they have oodles of extra cash they could put into R&D. Of course, they wouldn't do A TON of R&D right now, but over the years they could get it down to $250-$350 price range when it launched.
Again, probably just wishful thinking, but it has some basis for truth. As we can tell by the radical price drops, if Sony had launched the PS3 a year or two later like they wanted to, they would have easily been able to start at a $399 price point or lower.
I think Sony will realize it was a mistake to let the competition launch first, and will do their best to have PS4 ready before the competition's machines are out. In fact, I think this generation has been a real eye-opener as to how important launching first is--I think that when the first manufacturer announces their console's release date, the other two (or three if there's a noobie) will be out within three months.
I see announcements in 2011-12, and releases the following year.
Could I trouble you for some maple syrup to go with the plate of roffles you just served up?
Tag, courtesy of fkusumot: "Why do most of the PS3 fanboys have avatars that looks totally pissed?"
"Ok, girl's trapped in the elevator, and the power's off. I swear, if a zombie comes around the next corner..."