The only thing we actually know about Sony's PlayStation 4 is that we shouldn't expect it anytime soon, but rumors are starting to pop: one week ago, Kotaku heard that a "PlayStation Orbis" might include both an AMD processor and AMD graphics, and now IGN's trusted sources say that's absolutely correct. According to the rumor, the next PlayStation will include AMD's A8-3850 APU and Radeon HD 7670 discrete graphics — both of which are included in PCs that you can buy today.
If you're familiar with AMD's chips, you probably know that the quad-core 2.9GHz A8-3850 already has integrated graphics on board, but IGN says the console will actually use those two graphics solutions in tandem for increased performance: an asymmetric CrossFire configuration that's already possible (but not that popular) with the company's off-the-shelf desktop parts. It could also mean a cooler, quieter PS4 if the discrete GPU can be turned off.
Now, if you're thinking it's a little odd that the next PlayStation would use off-the-shelf chips instead of custom silicon, you're not alone, but it's not that far-fetched an idea: Sony famously lost a lot of money on the custom Cell processor and RSX graphics in the PlayStation 3, and we've come to the point where mid-range PC components are more than capable of graphical prowess beyond the current generation of consoles.
AMD might be having a rough time in the desktop and mobile processor markets, but if all three major video game console manufacturers are indeed using the company's silicon, it must be doing something right.
Update: IGN has clarified that the PS3 successor's chipset described above is based on the off-the-shelf components and not the exact components themselves.