A Sony spokesperson stated Mr Kato’s comments were "taken out of context", and that Kato actually meant their development of the NGP (now evidenced to be called the PlayStation Vita). This is supposed to be Sony's response to Project Cafe, albeit it would be more of a competitor to the Nintendo 3DS. Sony's line is that the Vita would be their hot new device to grab attention from the new Nintendo console.
Of course, it's safe to say that Sony probably is developing the PS4 - just as Microsoft has already begun work on the Xbox 720 - but they're not prepared to release any information on it now.
Sony: We're NOT working on PS4
29 May 2011 | By JonahFalcon