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What was once the market leader in gaming technology is now starting to look like an out-of-shape, former heavyweight champion, trying to live off his past glory. It’s no secret that Sony Computer Entertainment has been in financial trouble for quite some time. As recent as May, 2009 Sony’s gaming division reported a loss of nearly $420 million. Meanwhile, the leaner Nintendo Corporation has managed to build a product that is fun to play and cheap to produce. Not to mention the fact that Microsoft’s Xbox 360 is humming along quite nicely with its low price and superior selection of games.

So so you think Sony feels any pressure to turn things around in a hurry? But when Sony released the PlayStation 3 it was with the understanding that it would be around for 8 to 10 years. And game developers who’ve become accustomed to writing for the PS3 are in no hurry to move outside their comfort zones. Certainly, not many PS3 owners who dropped 500 or 600 bucks on a new console are ready to see their investments become yesterday’s news anytime soon. So what to do?

The answer is that Sony may not have much of a choice. This is about business, and sometimes tough choices must be made in the name of survival. Under better economic circumstances, things might have panned out a little better. Maybe fewer consumers would have been drawn to cheaper products like Nintendo’s Wii. Maybe the PlayStation 3 could have at least turned a profit for Sony. Four years ago, the thought of releasing a PlayStation 4 before the year 2013 would have seemed crazy. But the way things are shaping up — and shaking down — I’d be surprised if a PlayStation 4 weren’t on the shelves by Christmas of 2012.

Impress Watch, a Japanese news website, issued a report stating that the PlayStation 4 CELL processor architecture may bear a striking resemblance to that of the PS3. According to the report, feedback from developers is being sought by Sony before making a commitment either way. Considering the development of the PS3 set Sony back a tidy $3 billion, such a move would allow development of the PS4 to proceed as an extension, or continuation, of the PS3 rather than a departure.

Was this Sony’s plan since the inception of the PS3? This makes sense when viewed in the larger context of Sony’s efforts to revamp itself into a leaner, more competitive player in the consumer electronics market. By continuing on the road that was paved by the PS3 Sony could be all but assured of a smooth transition to the next generation platform. This becomes particularly important for timing the release to coincide with that of Microsoft’s Xbox 720 (or whatever it will be called) and Nintendo’s Wii. This approach would also eliminate a big question mark for game developers who need to know the hardware configuration before than can commence writing games for the PS4.

When Sony Chairman and CEO Howard Stringer recently announced that Sony intends to beef up the budget for its gaming division many people wondered how this would make sense, especially in while in the midst of one of the worst global economic recessions in decades.

While Sony has repeatedly insisted that the PlayStation 3 will have a lifespan of (roughly) 10 years, recent reports that Crytek has admitted to having begun developing games for the PS4 lead one to question how set-in-stone this 10-year mark really is. This view is consistent with comments made Crytek president and CEO, Cevat Yerli, at the Games Developers Conference in Leipzig concerning a possible release around 2011 – 2012. Stated Yerli, “The PlayStation 4 and Xbox ‘720′ will arrive in 2011 or 2012, we think.” He later added that the NDA (Non-Disclosure Agreement) under which Crytek is bound precludes making public any information about an exact release date, even it were known for sure.

One thing we can say for sure is that Sony will be hard pressed to not keep a close eye on Microsoft. Losing even more market share to the Xbox is not something that would sit well with shareholders who have seen Sony suffer unprecedented loses in recent years. This is not to mention the growing popularity of Nintendo’s Wii.

In the end, we’ll just have to wait and see.

While gamers, for the moment, are content with their PS3’s it’s hard to resist the temptation to speculate as to the next iteration of the Sony PlayStation, the PS4. The concept shown in this image recently surfaced amid rumors that Crytek has already begun developing games for the next generation PlayStation.