Squilliam I agree with writing off the losses. The company and the investors simply must concede, and accept the money lost is money gone, and that they will never recoup those losses. However Sony borrowed against the PS3, and those losses cannot be written off. Sony cannot simply say we lost money so we do not have to pay back that seven hundred million we borrowed with interest.
Sony borrowed the money ostensibly, because they could not eat the losses from the launch on their own liquidity alone. That means that the company has limited cash reserves. Thus they are right now planning to sell bonds to cover their maturing debt. Basically it is robbing Peter to pay Paul. Ideally the losses incurred in the gaming division should be offset by other divisions. However now losses in the gaming division must be offset by accumulating more debt. The division must make money lest in increases the corporate debt load.
Remember the Rules of Acquisition clearly state. "Dignity and an empty sack is worth the sack.". Sony cannot afford to think as a deluded fanatic thinks. They cannot do something, because it suits their pride. I think Sony needs to follow the 35th, and the 76th rules of acquisition. "Peace is good for business.", and "Every once in a while, declare peace. It confuses the hell out of your enemies.".
Sony would do better by being profitable even if they lose the console war, and by declaring peace they are sure as hell to put the others off guard, or at least lull them into a false sense of security. Either way they will probably focus on their own profits, and perhaps be less avid about stripping away the profits Sony desperately needs.
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