Sony is in competition with Microsoft to bring a next-gen console to the market. Sony realised that when Microsoft released the Xbox 360 with a relatively cheap engine, this allowed Microsoft to capture a healthy chunk in the gaming market.

Also the PlayStation 3 is a distance away from the Wii in the market (especially in East Asia). This made Sony to think as to making a smaller console, as the Japanese buyers prefer smaller platforms.

While the PlayStation 3 has only recently been released and has its best days still ahead of it, Sony is not one to rest on its laurels, and with the intense competition in the video game world, plans for the PlayStation 4's future release are already being put into motion. In fact not only is the PlayStation 4 getting this treatment, but even the PlayStation 5 and PlayStation 6 are in the early stages of planning and conceptualization at Sony’s R&D labs.

While Sony has not released any official information concerning the system’s future launch, the generally accepted release date is pegged as late 2012, which would follow the trend of Sony’s previous console generations. The PlayStation 1 was first released in late 1994 in Japan and 1995 throughout the rest of the world. The PlayStation 2 hit stores in 2000, giving the PS1 a retail shelf life of 6 years from its Japanese launch. Likewise, the PlayStation 3 came out in 2006, 6 years after the release of the PS2. Following this trend that Sony has established would give us a late 2012 release for the PS4.

It’s possible that how the PlayStation 3 fares in the current console war may also determine the release date of the PS4, for a couple of reasons. If the system continues to flounder in 3rd place in the console wars, failing to generate the revenue which was initially expected of it, Sony may be far more eager to cut their losses and rush the PS4 to market sooner rather than later, possibly as early as late 2011.

If the PS3 does indeed fail to make ground on the Wii and Xbox 360, it may also convince Sony to try and jump the gun on the next generation console wars and get their system out the door first. Both the PlayStation 1 and PlayStation 2, which dominated their generations of the console wars, came to market at the same time or earlier than their competition. The PlayStation 1 was launched just after the Sega Saturn, and well before the Nintendo 64, while the PlayStation 2 was released before both the Xbox and Nintendo Gamecube.

This enabled Sony to get a head start on the competition and gave developers time to build their skills at developing games for the console, to the point that even as more powerful consoles came after, games released on the older system were just as good technically, providing no real incentive for players to move to the new consoles.

In a recent interview, Doom and Quake creator John Carmack speculated that Sony will likely attempt to be first to the dance floor with their new console, before Microsoft launches their next console. As talked about above, there is plenty of rationale in this line of thinking. On the other hand, Sony has long maintained they have a long-term plan for the PS3, and with the lower production costs of the new slim model PS3, and the increased sales of the new version, the PS3 may just be coming into its own. Whether Sony will try to launch before Microsoft (by all accounts Nintendo will actually launch first, but they’re not considered direct competition to the others like Sony and Microsoft are to each other) remains to be seen.

In an interview with GameSpot at 2010's E3, Activision COO Thomas Tippl shed some up-to-date, though still quite vague light, on the PS4's future release. When asked when he expected the next generation consoles to release, Tippl stated that it was unlikely they would see release within the next 2-3 years, as Activision still had no information on any new consoles. With development times for next gen games running 2-3 years on average, it makes sense that if the new consoles will come with third party games at launch (a near certainty), it will be at least 2 years from the time third parties first get the development toolkits in their hands to the point where the console releases. In the meantime all we can do is speculate and continue to wait. (source: wikipedia)