It's known for a while that the PS4 would have a 8GB RAM, a lot more than its predecessor that only had 512mb. However, Sony never specified how much space would be used for game coding.
According to what has been revealed to Digital Foundry, 3.5GB of the 8GB GDD5 that the PS4 has, is reserved for the operating system, which means, game developers will only have 4.5GB of memory to work on game coding, and most likely, that's the amount of space all launch titles will be using. However according to some other source close to Sony, these 4,5 GB is just a baseline, with source indicating that developers can request up to an additional gigabyte of "flexible memory", and use it to boost elements of the game - but only if the background OS can spare it.
UPDATE: According to a new source, the additonal memory that developers can use for application development will be 512 MB, and not 1GB like mentioned before.
The current PS4 kits that were sent to developers have a "Game Memory Budget Mode" in the debug settings featuring two options: normal and large. The normal mode setting confirms that 4.5GB of memory is usable for game applications, while the large mode increases this considerably to 5.25GB, but the docs are clear that the extra RAM here is only available for application development, presumably in order to house debugging data.
When comparing the PS4 to the Xbox One, you will notice a lot of similarities. Both consoles allocate two Jaguar CPU cores to the operating system, and what sounds like a disproportionately higher level of RAM than one might expect. However, in a world where even the Wii U reserves 50 per cent of its onboard RAM for the operating system, the big bump in PS4's OS allocation is perhaps not completely surprising. Added to this, it's already been confirmed that the Xbox One will be dedicating 3 of its 8 GB RAM to operating the system, leaving 5GB to game coding, which is not much diferent from the PS4.
The console's leap from 4GB to 8GB has seemingly opened the door for Sony to be much more ambitious about what tasks the PS4 performs in the background and in parallel with gameplay. With this the PS4 might be capable of feats resembling to the PS Vita - where you can pause the game, switch applications, and once you are done, gameplay continues without having to restart the code. The convenience and functionality is undeniable, but it comes at a cost to memory consumption.
With both consoles launching with a 8GB unified memory, but with only a little over half of it available for game developers, some may wonder why Microsoft and Sony did this. According to a source near Microsoft, this was done in order for the background platform to evolve over the years, since it's very hard to add features if the pool of available RAM is reduced from its initial level. Most likely, Sony will have similar plans in mind.
Both the PS4 and Xbox One will be released sometime in November this year for $399 and $499, respectively.