Actually what Sony should do is simply ride out the PS3. Put ever DQ game ever made on a single bluray disk and rule Japan.

Sony will never launch for anything below $399 from now on. Inflation is part of it but their strategy is the other part. Sony use a price skimming strategy with their consoles. Basically it means that they have a high price at launch so that they are only really targeting early adopters. Nintendo went for a penetrative strategy this generation, they went straight for the people that would buy a console 3 years into it's life and it made the Wii explode in sales. That's more or less why we're seeing a 2nd year peak for Wii (Unless Nintendo manages to turn it around next year).

Sony will launch the console at $399 and take around a $100 loss on each system at launch. They've always done this (taken some sort of loss at launch) and they will continue to do so. Nothing else can be certain. I assume that Sony are aiming for a 2013 launch and nothing can be certain when it comes to hardware. I think a good 8 - 12GB of RAM will be there, a good TB or more of memory, I don't think they'll go for a SSD unless they really come down in price in the next few years.

The CPU they use might be an improved Cell processor but only if Sony still think that it is the best option on the market at the time. I'm sure they'll ensure that the GPU + CPU + RAM combination is highly optimised this time to lower bottlenecks etc.

The controller will depend on how this generation continues to pan out and from developer feedback. I'm not even going to make a guess here..

On the topic of launch games, as I said before, Sony are going after the early adopters at launch, they don't want the people that would buy their console in year 2, 3 or 4. All they need to launch the console with are games that show a clear distinction between the PS3 and PS4 and also a clear distinction between the PS4 and it's competitors. New IP's generally do the best if they are launched early so Sony will launch a couple of new IP's at launch, just as they did with Motorstorm and Resistance for example. The big guns won't come until the second year. There isn't any point launching them earlier than they're needed.

Price: $400.00 max at launch.

Media: Don't use a brand new HD format that is both expensive, and seen as a luxury. Especially when most people have not upgraded to HD (talking this gen). That only jacks up your console price, and is not going to sell your console.

Hardware: Don't get too far ahead of the competition. Devs will have a hard time porting over to you, and you will lose them. The only people this is good for is the devs that make your exclusives, and fanboys.

Advertisements: for gods sake, make good, relevant ones that actually showcase your product. Ones that don't leave people going wtf was that?

there won't be anything "easy" about it.

This comment would make sense if the Dual Shock 3 was not the same is the Dual Shock 1 and Dual Shock 2. Oh wow we got triggers now, big deal - The shape is the same and analog still too low.

EDIT: Point is I AM USED TO THE CONTROLLER

If it was easy they would have done it already.

@ Icyedge: The PS3 controller is precicly the reason I wasn't interested in gaming till '03/'04. (no joke, I used one once, and it felt so unnatural) Yes the D-pad is far superior, but I took my 360 controller apart, made a few slits in the rubber between the pads, and now it is about as good.

@Dr. Grass: It's called the "XCM Cross Fire". Also, the PS3 analogue sticks fit on the 360 controller (with a little sanding on the round base that sits inside the controller) so  Isee no reason why the reverse could not be true.

Launch first with a capable console. That's it. If The PS4 launches 1st, and has similar capabilities of its competition, it should win.

Does it wear a coat?

I dunno, the PS3 brand has been damaged this gen. In either case, next gen, Sony WILL be a force to reckon with.