Edge, which reports that Ubisoft is currently working on projects for Microsoft's next console using "target boxes" designed to emulate the system's projected specifications. Supposedly, these boxes contain components provided by Microsoft, with actual development kits expected to be in the hands of studios by the end of the year. According to Edge, a 2012 launch for the console remains likely.
Meanwhile, the site also reports that a "major Sony-owned studio" is no longer working on PlayStation 3 development, fully shifting its resources to the next iteration (we're going to go out on a limb and call it the PlayStation 4). Furthermore, said studio has apparently been "involved in the development process of the graphics technology" used in the upcoming console.
Now what Sony game could possibly need more graphical horsepower? Oh, wait.