"Gamers are desperate for innovation and better games."
Seriously?

Yes, it's a crossroads. As I understand it, it's "more features", "better software" or "moar powar!". I hope they'll follow the "moar powaaar!!!"

This review is portraying a false dichotomy between software and hardware. Sony is a huge company and obviously will have departments working on new hardware and software, individually. If they don't upgrade the hardware substantially then there isn't much of a reason to buy the new playstation. The benefits of new software do not outweigh the benefits of new hardware. Sure there are going to be some awesome improvements (hopefully) but we pay for the hardware so we can play games with more than $1.99 of content and development; you cant stress this enough, there is very little comparison between a game thats taken 2-3 years to develop versus a small $1.99 tablet game with 100 mb of content. Watching movies and TV can already be done on the PS3 as well as downloading small games worth < 5 dollars. *It's all about the hardware*, software flows naturally from the hardware, assuming they have people following current trends and designing for them (which they obviously do).

Most parents I know in the UK don't want the TV in the living room taken by the kids for gaming, they have their own screens, so it's not about being an entertainment system for the living room.

The PS should remain a gaming centre first,and provide DLNA capabilities for accessing media.
TV's and STB's are already doing this anyway, providing online media access directly so what does the PS have to offer here.
The only reason ever to want a console would be to get a very immersive gaming experience that can't be achieved on a tablet so if the don't provide serious HW upgrades it will be a failure and the end of the line for the PS.

"Sony can't build a company on those few people who are hardcore gamers, so they have to figure out how to bridge to the all-purpose consumer who likes games, which is most of us," McQuivey said.

All they have to do is allow one to upgrade the PS4 GPU as is the case in the superior PC gaming world. License out the GPU specs to nVidia and the other 3rd party GPU makers,... and merge the PC gaming market with the console market.

If they don't significantly improve the hardware, there will be little point in owning one. Home entertainment is already online. The term "Ecosystem", should be read, "another exclusive path to your wallet".

Whatever Sony does, they need to do it well! I think they need to put some decent hardware in the PS4! I play my playstation 3 occasionally, but I game on my pc much more because the graphics, controls and configurability give me a better experience. I have even bought games on the ps3, only to buy the same game on a Steam deal for my pc. Gaming is so much better on my PC, its like playing a whole nother game! If they dont put some serious hardware in the ps4, it will not interest me at all. It must meet or exceed the performance of a decent gaming pc to be successful!

very simple imho just bring better peripherals like a 6axis hmd for control of one joystick for ex , you have to offer more than just good graphics ...