The price of the technologies PS3 is built around were far more expensive than stuff that could be used to build a console capable of running todays most demanding game engines well in 1080p 60FPS today. PS3 had an expensive CPU called the Cell Broadband Engine, Bluray, expensive RAM. HDDs have come down in price, Bluray drives have gone from costing £120+ to build in 06, down to about £20 for something that's faster & more efficient, even fast RAM that exists today is cheaper than what's in PS3. Seriously the only part that will cost a lot in PS3 is the GPU & even if Sony went with AMD's best desktop GPU, adapted to Sony's requirements they'd probably still pay less than half of retail to get it into PS4. If you or anyone actually does research on what's required for tomorrow's games and what it takes to run the likes of EPIC's Unreal Engine 4, Squaresoft's Luminous Engine, Dice's Frostbite, etc then you'd see what's needed. The main guy responsible for PS3's cell vision has now left the playstation devision, Kaz Hirai is the main guy responsible to Sony's games now, he wants a capable machine that's reasonable for people to buy, so that Sony can get back to owning the console games industry. A machine that isn't accessible to anyone but a few people at launch isn't going to be what Sony's releasing this time. A £500+ console is not what we'll be getting. For sony to build a machine capable of running UE4 at full 1080p with the majority of effects turned on, high levels of detail & at a frame rate of at least 30FPS we're looking at an AMD APU, built around either 4 Bulldozer, or 8 Jaguar cores, an 7970m processor & 4GB of GDDR5 RAM (this is based on current dev kit rumours, but fits with requirements of what it takes to run modern game engines, especially considering there's meant to be an APU which is mroe efficient than having separate processing tech). Expect no more than the £450 if PS4 has a basic dual shock controller or maybe some Move varient. If it comes with a tablet then that could drive prices up to £500. Yes people are willing to pay that sort of money for iPhones/Pads, tablets, laptops, etc, but given how much it costs to make a console that can run modern games well, even with advanced controllers & pretty powerful processors today at most it will cost what PS3 cost at launch, with inflation, which is around £500 & that's without Sony really taking much of a loss. Everyone dealing with this subject has to think logically about how the console games industry works, how consoles are built around technology from other manufacturers, in this case it's mainly AMD, for the APU/CPU/GPU, Samsung or some other company for RAM, Bluray drives are probably made in-house unless they can be manufactured cheaper by another company, HDDs is the same deal, that's what makes up a console innerds. People need to understand that Sony won't pay RRP, Amazon prices or whatever for their parts. Dollars to pounds there will probably be a $50 increase over whatever PS4 retails for at launch in the UK, least that's how it works for Wii U right now. It's doubtful that PS4 will cost more than $550. This console certainly won't cost $800, let alone a grand, that just doesn't seem possible with how the industry, profit systems etc work for Sony. Sony makes a loss on initial hardware, making their money back, then profiting off of Software & Peripherals. Swallowing the cost of a couple of games with the hardware & maybe some extra controllers, PSN+ Sony can break even on each console quite quickly this time around. Considering most owners of PS4 will probably buy more than 20 games for their console profiting off of 17 games or something means billions in profits for Sony over the life of PS4. If PS4 sells similar numbers to PS3 then being conservative 60 million consoles will be sold in about 7 years, say 10 games are sold & make a profit per console, that's 600 million games sold, if each of those games made Sony £10, that's six billion pounds or nearly 10 billion dollars over 7 years. Sony only cares about the profits they'll make overall. If they sell 20 million games to Playstation customers every year they're making hundreds of millions of pounds every year off of the playstation gaming brand. Every company wants to make money, they don't have to charge a 800 dollars per console to make a profit.