The Sims 3

The Sims 3 is a confirmed next-generation simulation game. This was confirmed on November 2, 2006, by EA chief financial officer Warren Jenson.

"Yes, there's a Sims 3 in development and it's likely to be a fiscal '09 title". ~ Warren Jenson on The Sims 3

The Sims 3 (working title) was announced in November of 2004 and will be released in the end of 2008 in the USA and in 2009 in other regions.

It is Speculated of the game being in a city.

In July 2007 AI researcher Richard Evans , who is part of the TS3 team, gave a talk at the annual AIIDE (Artificial Intelligence and Interactive Digital Entertainment) conference in California, notes from which can be read here.