Sony is working on a brand new PS4 that could incorporate new Intel processors, says a source. The device, which will be cheaper to manufacture than current model PS3s, will also get new Intel graphic processors (GPU) and Gigabit wireless technology if it goes ahead.Currently Sony uses the Cell processor manufactured by Toshiba.

A Sony source said that Intel technology was being used in development models; however, no final decision has been made because of concerns over heating and the potential of the processors crashing when used in a gaming environment.

A key element of the PS4 will be the use of technology that allows the device to be used as a media hub for movie and TV content. It has to have upgradable storage capability as well as slots for SDX cards that will be capable of delivering up to 4 terabytes of storage in the future.  

The new device will also have 7GBs WiGig wireless technology, which will allow the PS4 to talk to Sony Bravia TV and display screens, which will also incorporate WiGig wireless technology.

18 months ago, Sony boss Sir Howard Stringer said that he was not interested in Intel or Microsoft technology inside Sony TV products because of the potential of “crashes or freezing” similar to what consumers currently experience with a PC.

However, sources say that Intel has shown Sony new processor technology along with new onboard graphic display technology, impressing the Japanese company, which is are looking to release a PS4 that is profitable when sold.

In the past, Sony has sold PS3 consoles at a loss. What is not known is how Sony would make the console backward compatible to allow older PS3 games to be played.

Currently Toshiba is further developing the Cell processor, with the company set to demonstrate its new Cell processor TV at the 2010 CES show in Las Vegas. It is  also working on a Cell Processor media centre that will compete head-on with new offerings from Sony.