Since blu ray is more flexible than dvd i imagine they'll keep using it. Maybe go with a faster reader and a more powerful laser allowing it to read 8 layered discs.

Each Playstation so far has used a different medium of storing games. PS1 (CD), PS2 (DVD) PS3 (BD) so I expect to see something different in PS4.

PS1 could only read CD, and the PS2 could read CD and DVDs

I reckon, because Sony has a stake in Blu-ray, as well as they make money from it, that they will try make blu-ray last, and a simply yet effective way for them to do that, is to release the PS4 with blu-ray drive, maybe something like x8 or x12 speed, along with making it compatable so that it can read 4-8 layer blu-ray discs...at least for games, and we should have something like 200 or 400 gigs on them that developers can choose to play around with for example.

The Ps4 will use Red Matter.

Why wouldn't they stick with Blu-Ray? Download only is not an option because games may get up to 100 GB or more. Not only will storage be a problem but 4 games at 100GB will meet or exceed most peoples download limit. DD may work for handhelds but not for consoles in the foreseeable future. I also doubt they will develop a new disk cause it's not worth the money and a 100 GB cartridge would cost at least $30 on its own.

I think that the PS4 will continue to use Blu-rays.  

For the people who point to the PS1, PS2, and PS3 all using different formats, consider this:  

The CD format was fairly recent, but not brand new when the PS1 released.  In fact, the Sega CD had been around for some time using the same format.  

The DVD format was pretty new when the PS2 released.  The Dreamcast, released only a year or so earlier, used a custom disc only twice as big as a CD (much much smaller than a DVD).  In fact, the fact that the PS2 was a fairly cheap DVD player was considered a significant selling point.  

The Blu-ray format was so new at the time the PS3 released that it wasn't even really ready.  It was very costly and there were shortages of the optics or diodes or something, because the technology was so new.  I guarantee you Sony wishes that the technology had been a bit more mature at the time the PS3 had to release.  

What I am suggesting by recounting these situations is that the console generations have outpaced disc technology advancement.  Even if Blu-ray gets a successor in a similar amount of time as the other two did, it will not be in time for the next gen.  

As for the people saying the PS4 will exclusively use digital distribution:  the PSP-Go may have bolstered your argument, but I really, really don't think so.  There are huge amounts of the market that cannot realistically use DD as their only way of getting games.  Sony will not turn its back on that money.  

Now, as for the OP question of what impact this will have on pricing:  obviously using a mature disc format will mean that their production cost will be much lower than it was this time.  In addition it is widely speculated that the PS4 will use an advancement of the Cell-type processor.  The PS4 will probably also be less focused on the "power struggle" which also will let Sony keep costs down.  

My own speculation is that Sony will shoot for $300 as a launch price; IIRC PS1 and PS2 both launched at this price.   

That sounds amazing!

Yes Sony has to go simple with the PS4, so that means nothing big and different like the CD, DVD and Blu-ray was. Blu-Ray has still so much more potential, what with the 500GB Blu-ray disk, and I highly dought we'll see games as big as 500 GB in the next 5 years.

It'll be cheap and should be running at a much higher speed.

blu-ray has been in development since 1997..so it's far from new but in terms of  adoption it is for the most part. One thing already is clear by the time a new console cycle start's blu-ray will still be in the market along with DVD. Most likely Sony will indeed stick with Blu-ray since there are already 8x speed Blu-ray optical drives for PC's at $149.00 right now in 3 year's that price will be much cheaper by then.So i see Sony will still use Blu-Ray in the PS4 .

This.

DD will not take over for at least 30 years. people like collecting stuff ... thats just it. also games are to big to download and store right now. Sony will stick with blu-ray till they make another movie format because they have to make money on it at some point and blu-rays are selling good right now.