PlayStation 4 development confirmed by Sony

And the company is looking to cut costs - Sony has begun development on the PlayStation 4, with the games giant confirming that work on the console was already underway.

In Sony's year-on-year results of its Networked Products & Services division – which comprises the PlayStation brand and PCs – Sony hinted that it was working on the PlayStation 4 but would not give any more details.

PlayStation 4 plans

"For the home equipment the PS3 still has a product life," said Sony's Masaru Kato.

"But this is a platform business, so for the future platform – when we'll be introducing what product, I cannot discuss – but our development work is already under way, so the costs are incurred there."

Kato also explained that some cost-cutting will happen with the development of the PS4.

Speaking to investors, he said: "It is no longer thinkable to have a huge initial financial investment like that of the PS3."

This makes sense considering the amount of money Sony pumped into the PS3 in its initial development phases.

It was only with the launch of the PS3 Slim that Sony could actually count on making a profit with its next-gen games console.