lets say ps4 uses the cell, of course upgraded. well the cell has already evolved in its own way so slap it back in. same with blu-ray. have nvidia make a better graphics card, nothing too fancy. throw in a smidge more ram and you got yourself a ps3.5...err ps4. cheap and easy, not much R&D costs in that. and lots of devs would be used to the development process on the machine, keeping a similar archetic.

lots of ways to make a new console cheap and without loads of R&D costs

Yes, but having another pronounciation doesn't take away the cultural and superstition factor. Just like you won't find many buildings in America with a labeled 13th floor (and some hospitals in Japan don't have a labeled 4th floor). Basically, calling it PS4 in Japan is asking everyone to joke around calling it PS Death, the last Playstation, etc. Granted it's not that big of deal, but its inviting ridicule unnecessarily. Plus, Japan is a fairly superstitious country (though not overtly religious), and naming it the PS4 would be like MS deciding to launch their next console on a Friday the 13th.

As an example of how saying "well, it's the PS Four (or PS Yon)". You know what some popular nicknames for the Xbox are there? Pecke-bako (one way they refer to the "X" mark), meaning failure box, even though it's officially pronounced phonetically the eh-kusu-boh-kusu.

My belief is that a Japanese company will not name one of their flagship product in manner that could suggest of imply death. They're very superstitious about those things, even if they don't really believe in it.

I honestly do not see Sony continuing on as a console manufacturer. This generation has highlighted once again how high risk console manufacturing can be, and less importantly how little profit is to be made. Especially in the face of stiff competition. What Sony needs or wants is low risk with high yield. Preferably with a fast return so they can recoup investments quickly. Rather then delayed or deferred results draining their liquidity.

More pragmatic is the competition. Firstly having greater capital reserves. Second having greater consumer momentum. Third having stronger partnerships. Finally are willing to win whatever the cost. Microsoft and Nintendo are getting stronger, and have more incentive then ever to push Sony out of the market place. Like it or not Sony is really at the mercy of the competition here.

I think Sony will probably move towards third party development status, and perhaps an online gaming hub. Which would probably give them a better bargaining position. Both are high return with low risk. Which is what Sony will need in the coming years. Especially since the competition is not very apt to rest on their laurels. Sony is going to have another generation thrust upon them long before they are ready.

I am just not seeing how Sony will be profitable in this space. Given the inherent risks, and the competition it faces. Software is where they need to be. They would be far more financially successful.

@markers

Sony is in a bind. They need to reset the market. A small incremental update to the HW will not help. A small update will make the old PS3s obsolete, and at the same time will fail to create any excitement in the market. A pure lose-lose.

So to achieve a market reset they need a big release. Something different. Something exciting. Something that costs a lot to develop. Something that will cost more to manufacture. Something that no one in the market except Sony has any incentive to see succeed.

isn't that what they're trying to do with the PS3?

OT: yes, PS4 in 2012/13 for EU release. probably.

And look how this turned out for them. Billions in the red. Profitability out of sight. No hope of ever recouping the costs even in the very long run.

As NJ5 said - the days of the lose-leading console business model are over. No one in their right mind will ever attempt it again. From here on it is about efficiency and maintaining the large install base and moving the base slowly to more features without pressing the reset button.

This works great for the Wii and the 360. This is terrible for the PS3 which has the smallest base and the worst business model to make money off the base it has (no subscriptions, no accessories, no huge 1st party titles ala Nintendo).

The days of the big disruptive new gens are over.  No more resets. No PS4.

The Wii was a reset, Nintendo (with Iwata in command) brought something innovative, different and exciting, and it was not a drain, the were able to even put the console in a 250 price tag and sell it for a profit... Sony's drain was in one thing: Blu-Ray, the Cell costed as well but Blu-Ray was the main thing... Next gen they wont need a new media, nor a new CPU architecture, they will only upgrade the console's power and innovate in other area...

Nintendo pulled something that was totally unexpected. They created a new experience, attracted fresh audiance, did it all with little cost and did it with virtually zero 3rd party support and solely on the increadible strength of their first party defining titles.

Anyone who can replicate such a combination deserves to win the next gen. I have no idea what such an idea would be. I doubt anyone has such a briliant idea like that. But if Sony can truely create a low-cost, new experience, new audiance attracting console and ship it with amazing defining titles like Wii Play or Wii Sports then by all means they should build a PS4.

But anything short of that will be a loser.

I believe the reset will continue t be part of our gaming lives. If only because all rabit journalist will jump over any incremental change as a new gen (honestly, I believe that the Xbox - X360 and PS2 - PS2 where merely incremental changes based on theoretic literature on the subject.) It'd be great financially speaking for manufactures if we retained one gen but at some point you milked everything you have out of a console and you will need new features that require more innovations, wished for by the developers. At some point you cannot sustain a current gen. How many years that will take I don't know...

As for the PS4... It'll be here. There is a big chance that Sony might sit out next gen (and keep sitting on their PS3 for a few more years) but after major restructering and good economic prospects they are bound to return...

There will be a PS4 because it will be released in another time.
What I mean with that is all console-producers will face new challenges in the coming years.

MS has their shareholders who are expecting big profit-margins.
If MS cannot meet those expectations those share-holders will start to complain and invest their money elsewhere. And given the recent numbers ( Q2-2009 ) their revenue did not grow much ( just 3% higher then Q1, while Q2 is in the holidays ) and their profits in the division declined.
In other words: they sold a lot consoles to create a large userbase, millions of Gold-subscribers, high-priced accessories, big hits like Halo & Gears of War but it doesn't make enough profit.
Other problems they face is piracy, I know enough people who bought the console because it's easy to mod.
And what hardware will MS use in their new console, and will it be powerfull and cheap enough to face the competition ? And will the architecture change so much that developers have to learn the machine again ?

Will people who bought the Wii replace it with a later version ?
They don't care much about HD-graphics or 5.1 Surround Sound. So can Nintendo release a new console successfully when it only has improved graphics / sound ? I guess they will hang on to the Wii as long as possible.

Sony could play it a lot smarter next gen, they learned their lessons about price, online gaming and console features.
They don't make profits yet, but they heavily invested in Blu-Ray and I guess that will turn into some profits when the recession starts to fade.
The same with the Cell: I took a major investment, but it proved it's powers, flexible architecture and scalability.
They could easily put two General Usage Cells and a Cell-enhanced nVidia-chip in the next console to create a cheap and powerfull console.
And those developers who understand 1 Cell wouldn't have much trouble deploying and optimizing software for 2 Cells.

So yes, I'm pretty sure there will be a next PS, and another Ninty, but I'm not sure about the XBox. If the profits don't increase enough this year they might pull the plug and concentrate on their core-business: Windows, Office and Server-software, simply because their profit-margins are a lot bigger there.