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Hawkeye said:

What would Sony do then? Start advertising PS2 again, start their devs up on PS2 and PSP games? Where do they go from there?

 

Good question. There is no easy answer. Their first priority must be to stop the bleeding. They must make the PS3 at least revenue neutral. It is losing them over $1B a year and they will not be able to sustain such loses anymore. They will need to cut jobs, projects, features, games, marketing and quality. Anything to cut the costs. They may even raise the price knowing that they will be giving up on the race for this gen.

The PS2 is a dead horse by now. Cannot turn time backwards.

The PSP could be huge. It seems to be really picking up lately. Perhaps that is where their attention should focus.

Back to the PS3 - if/once it is stabilized, they need to make sure it does not drop to the red again. Again - forget about price cuts for a while. They need every penny and it takes precedent over the volumes produced and the competitive situation against Microosoft.

If the PS3 does not stabilize (and it is not easy to save $1B in cost/year) then they'll have to consider exiting the market. For good. They just cannot afford letting one product sink the whole company.



Prediction made on 11/1/2008:

Q4 2008: 27M xbox LTD, 20M PS3 LTD . 2009 sales: 11M xbox,  9M PS3