Thing is that Sonys inversion with the PS3 development will pay off in the long term too.

They have pretty much the hardware for the next console .

As CPU the Cell architecture is still in its begginings and is 100% escalable.They could put a motherboard with 4 ,6 ,8 or whatever the number of Cell is required.And in 2013-2014 it will be quite cheap.Or use the new Cell+ for that motherboard to have even more power.With 45nm production they could even pass the 3.2 gigaherz limit.

As GPU they have a long term agreement with Nvidia.Nvidia will provide the better card they have at the moment.At least it will be as powerful as anything the competition throws.

Storage .The Blu Ray with 6x reading speeds and up to 200Gb of disc space at 15cts cant be beaten by flash memories that cost a lot more.And they will provide a 250Gb HDD at the least.

Online.They have a working PSN that although still second to Live is perfectly competitive and for free.In 2013-14 Home will be implemented since many years and the difference between MS and Sony in this will be negligible.

Hopefully they push for something other than just being a beast technically wise. I dont see how you can get that much more improvement than the PS3 already offers. If you imagine another 400-500$ super computer for next gen, the change in graphics will really be minimal.

I agree software is where its going to be the most crucial.

@Bursche, I'm just saying from the outlook of things, they WILL have a beast, but it won't cost them much more, because the CPU is so scalable. They could easily end up with the most powerful console on the market yet manufacturing wise be the cheapest xD, and since it could theoretically use cell technology, all the current engines will work just fine, they only need to make minor tweaks to get almost infinitely more power out of them xD

@SSJ, Sony CAN'T release that for the PS4.... Rapture will be upon us ;-;

PS4 could end with being virtual reality console by 2015, unless it comes in 2012, then it`s probably will be able to produce reality graphics.

The only thing, that by the end of 2012 there won`t be anymore difference in graphics between systems.
Well, in 6 years i believe it`s possible, since Crysis already has great graphics and came by the end of 2007. And 6 years ago we were playing something like quake3, medal of honor:aa.

Time will show.. =) But there definetely won`t be needed 3-4 systems with same graphic capabilities by 2012.

I think they will really think about the Japanese market alot more with the PS4, while also considering the western hardcore market. Keeping the same architecture may not be a bad idea since now devs are getting a handle on it. I could see them using flash memory rather than a hard drive (i-pod touch has 32 GB integrated now). Probably a BD drive that can read more layers will be used as well.

I see the PS4 as being the midpoint between the Wii2 and the Xbox 720 in terms of graphics, give Xbox the high graphics ultra hardcore market. Give Wii the downmarket and be the mid player with a quality system. Give it lots of games and the best Backwards compatibility (Two things Sony needs now) and have a high standard of manufacture (No RRoD or DRE), and Sony will gain back a good deal of market share that they lost (but most likely not all of it)

Little early to be thinking about the PS4, the PS3 still has 8 years of life left!