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I believe one of the main problems is that they keps producing the PS2 and released the PS3. Either you do one or the other else you'll be selling three consoles, the PS3, the PS2 and the PSP. Consumers wont buy all three, max two and if done they wont bother buying the other one later, or atleast for some time.

This is all old news anyways. Things should be brighter for Sony next year. Their lineup is promising and so is the competition, all of which is only good for us, really.