The losses from 2006-2008 are irrelevant
It doesn't matter how you swing it really. You could say they are written off, you could say that they are the price Sony paid to win a format war, you could say anything at all, but as it stands so long as the company remains solvent and the crediters are happy there really is no cause for alarm. Sony has plenty of cash reserves to match up to any debt they hold.
The situation as it stands right now is untenable for the future of the PS3.
Not a big deal really, all it means is that they must take action. It doesn't imply at all that they won't or can't take action. They can't sell studios as no-one will buy them, name a Publisher that has the money and inclination at present to make an aquisition? They can't cut back their workforce drasticly because it would effect the morale of their staff to the detriment of the quality of their games. Infact the best course of action here is to stay the course as that sends a big vote of confidence down to the individuals working on their games.
The best long term solution for the PS3.
The very best thing they can do for the future of SCE and the PS3 is to sell PS3s. The more PS3s in the hands of consumers, the more 1st party games and third party royalties they can earn them. Also the more PS3s they sell, the more PS3s they can sell. Its a continuing cycle of positive reinforcement which they will not let themselves fall out of. Its pretty obvious that at some point they will have to bite the bullet and swing a price cut. They do have the option of increasing the value of the PS3, but as it stands right now its not a question of value its a question of price.
They could lose money on every game released in 2009 and still swing a price cut.
I said the losses incurred previously are irrellevant when discussing a price cut earlier, and I just said it again. Essentially they paid the price for swinging and hitting in the format wars and the PS3 paid it. I would throw much of the cost of the game development under the heading "Blu Ray format costs", you don't have to, but at this point it doesn't matter. If Revenue > Costs financial year 2009 with a price cut, they will do it. With a list of 1st party games that makes everyone here wet themselves with excitement the chances of pulling in well over a billion dollars in revenue to go alongside some massive third party software revenues, say at least half a billion are extremely high.
Discuss!
Tease.
