I'm certain Toshiba cant do anything these days that can remotely compete with ATI/Nvidia anymore, and are we really thinking PowerVr can?
Well you never know what Toshiba can do. They've been active with leveraging Cell SPU. So if we ever going to see a Cell GPU like Larrabee, it is most likely from them.
PowerVR their last competitive part was Naomi 2, which was competitive with what were available at the time. They might not come out on top in term of performance but I think at least they can come up with something competitive.
If Sony isn't going to go with Nvidi, ATI, or at least Intel, they're probably going to suffer a significant graphics deficit. And they might even with Intel. So, yeah.
All Playstations always have graphics deficit, I think the GPU just need to be competitive and meet all the requirements (like emulating PS2 and scaling that work).
The important of next gen is going to be power. I think that's the limit. Especially now we have seen that smaller form factor consoles are an easier sale.