If Sony were wise, I think they should just follow Nintendo's approach and not go bleeding edge with their technology for the PS4. They need to be moderate and fall within range of the WiiU.
Considering right now the
best case scenario for the Wii U (given what little we know of its specs since Nintendo has not released any specifics) is that it's
marginally more powerful than the PS3 and 360, I'd say that it's Nintendo who went moderate and fell within range of the PS3.
As for Sony's next console, I think they and Microsoft are constrained by the need to try to keep up with where PC specs are headed. Certain key developers like Epic, LucasArts, Ubisoft, and Square-Enix are starting to openly show support for tech only high-end PCs right now could handle, and that's support that neither company can afford to lose.
And for all the digs people have made at Sony for the way they stumbled into this console generation (and various mistakes since), they've done just about everything folks here wish
Nintendo did: they've established a strong home for 3rd parties, they've published an impressively-strong 1st party lineup (with a great deal of variety) with a fair percentage made up of IP new to this generation, and (although it took them a long time to get to that point) they have an online service that's competitive with Microsoft's and totally free to use. They've even managed to implement motion control into many of their top-tier 1st and 2nd party games in a way that gives players
options (rather than forcing motion control where it's not needed or wanted, as Nintendo
has). You may not like Sony, but just as a
gamer it's hard to argue that what they've done with the PS3 has been bad for
me or gaming as a whole.
I think if Sony
were to step out of the games business, it would be a sad day for the industry and possibly a harbinger of darker days to come. Like them or not, they offer experiences that the other two console manufacturers are lacking (you'd never see Nintendo put out a game like The Last of Us or Beyond: Two Souls, and you'd never see Microsoft put out a game like Sly Cooper: Thieves in Time or LittleBigPlanet, for example), and in so doing are part of a very delicate balance keeping the console market together. They are the middle ground providing competition for 2 extremely different companies who aren't typically in direct competition. Microsoft doesn't
really make games that hit the same target audience that Nintendo's do, and vice-versa. But
Sony releases games that hit the target audience of
both platform holders, and so there is competition to spark innovation. Their existence forces the other 2 platform holders to be strive to be
better where they might otherwise remain stagnant.