Sony Computer Entertainment is already working on the next generation of its PlayStation series, the PlayStation 3. So far, only a few words about the PS3 have come out of Sony, mostly from CEO and President of SCE, Ken Kutaragi.
The PS3 will be backwards-compatible with software from both the PlayStation 2 and the PSone. The graphics for the PS3 will be developed by Sony itself. The system will also support HDTV output.
Kutaragi also commented that the PlayStation 3 will not be solely devoted to video gaming. As the PlayStation 2 branched out slightly with it's DVD video capability, the PS3 will embed itself even further into the home entertainment system. The console will have connectivity features allowing it to connect to other Sony devices creating a home entertainment network (which would presumably connect to the internet.
The media for the PlayStation 3 will be the new "Blu-Ray" format of disc. Blu-Ray, named for the blue laser that reads it, can hold up to 27 GB, five times more than the standard red-laser DVD. (Although it appears that the standard that is being chosen by the major tech companies will hold "only" 23 GB.) Blu-Ray technology, though, is backward-compatible with DVDs.