I don't think this article gives people enough credit. We know that Sony is trying to push Blu-Ray with PS3. D'uh. We know the implications this has on cost reduction, and how various parts of Sony will see huge sales and profits if Blu-Ray becomes the Next Big Thing. D'uh and D'uh.
But we also question how effective selling 20-30 million PS3s over 5-6 years will be in creating cost reduction down to DVD level costs. DVD drives were in hundreds of millions of standalone video players and PCs, in addition to 150 million gaming consoles. That kind of demand will drop cost from $1000 to $20 pretty quickly. Do current weak PS3 sales assure Blu-Ray will see the same widespread adoption and cost reduction?
And if current PS3 sales cannot assure that adoption before its collapses as a gaming console, the massive cost reduction that PS3 itself would see will be moot; Sony's gaming business will be lost for the time being.
This article makes it sound like all of this is a sure thing, or even that throwing away their gaming business was part of the plan. The article makes extensive mention of the fact that the gaming market is small in comparison to these other markets. So how is failing in this small market going to be enough to assure success in these larger markets?
Clearly, Sony thought they were the de facto market king of videogames. Only vast, market-dominating PS3 sales, allowing them to execute their "10 year plan," would maybe give way to DVD-level Blu-Ray adoption several years down the road.
"[Our former customers] are unable to find software which they WANT to play."
"The way to solve this problem lies in how to communicate what kind of games [they CAN play]."
Satoru Iwata, Nintendo President. Only slightly paraphrased.
