Does anyone think Sony will pull the plug on the PS3 or PSP?

[Dodece]

I think Sony has a certain number in mind. A certain number of units must be sold by a certain point. Basically I expect them to have an exit trigger. A point of no return if you will. The only question is where is that point. I think the PS3 triggered such a point earlier this year when they did the price cut.

They probably delayed that somewhat to make for a bigger announcement. However it amounts to a seventeen percent price reduction eight months after launch. Which finally stimulated sales over four million world wide. I would gather that Sony was expecting sales of at least ten million units this year. I would venture a guess that eight million would be the trigger for Sony. That is double the last eight months with a holiday season to bolster sales, and a price cut. Finally they have a stronger lineup.

I would say Sony has to sell that many units to maintain commitment. They miss that target, and six months later you start to see the units disappear off of shelves as supplies run out. Sony will only announce that is what they have done after it becomes apparent.

Sony has investors to answer to, and even though both they and Microsoft have lost a lot of money on gaming. Microsoft is still feeding the masses, and has a reputation for brilliance. While Sony shares have plummeted, and they have had one disaster after another recently. There is a reason for the restructuring. Sony has been firing employees all year long.

The real question is can Sony meet the goals. There has to be a real physical point they have to meet in order to stay with their console. I think eight million is a logical and realistic number. They have four months to make that goal. Now if they fall short of that the implications are real. When you trend worse in the second half of a year with a real price reduction, a increase in software, and a established name. You should have every reason to expect to match the previous eight months, and you should hope to see a increase in sales. Now if the opposite happens its time to start plotting your exit strategy.

Will Sony sell eight million units in its first year on the market? Part of me says that it is such a small number that it should be easy to reach. However the PS3 has consistently underperformed expectations. Further more it spent most of its own time in a downward trend. The competition is exceedingly strong in the second half, and is sure to drive down sales. Nintendo and Microsoft have for more compelling points for the consumer, and to make matters worse Sony appears to have no good answer.

I would have to say Sony will not make eight million sales, and I think that is where Sony will begin to exit this console generation. I am not going with my gut on this, but the trend has consistently shown that the PS3 sales tend to slide downwards. Even after the price cut in North America the sales began to slide backwards again. Sony simply cannot afford to play this race as a Gamecube level seller. They are not using Nintendos model.

What is rather interesting is how the PS2 performs in the coming season. That is where Sony is making money. Were the PS2 to slip in sales that would increase pressure on Sony financially. So that is another area that should be considered.

Why would Sony pull the plug on the PSP. The sales are decent, and they made some ground on Nintendo. They have a decent install base. So they look to be making money there. Even if it is not Nintendo level money.