After a concept is chosen, there's the whole budget deal. A Blu-ray project on the PS3 generally has costs from $2-5 million just for a prototype (which takes over a year to create). After the prototype is created, the game gets shown to people inside of Sony to let them see how it's progressed as well as to create some marketing segmentation: who's the audience, what's the competition, how can they get said audience interested, et cetera. They bring in their selected audience to preview the game in the next stage and get feedback before development gets too far along to change the more core bits of a game.
All in all, it's a really interesting read despite our attempts to shorten the explanation. Sometimes it's better to just check out the original article, since you can also see some early concept drawings of Calling All Cars! and leave your feedback and questions so Shu Yoshida can check them out.