Sony cant cut the price

[Millennium]

Groucho said:

The PS3 was/is a commitment. Researching a new console at this juncture is folly (money is far better spent making the current one cheaper and cheaper), and Sony will be making money from software AND hardware this coming year (2009).

They're not going to close up shop until the PS3 and 360, combined, hold less than 35% marketshare -- because, at that point, all 3rd party publishers would abandon the HD consoles altogether and make Wii games. 20 million consoles was close to how many the GameCube had at the end of its life, last gen. The PS3 is not the PS2, but Sony is far from going the "Sega route".

Researching a new console at this juncture is far from folly: they're doing it right now. So is Nintendo, and so is Microsoft. That's just how the industry works: when you finish one console, you start work on the next. Sony, in its arrogance, might have shown up a little late to this party (witness the "ten-year plan" BS) but rest assured, they're doing it now.

But you're right that researching a completely new console as a quick replacement at this juncture would be unwise. This is why I suggest looking to the PS2, a position where Sony is still strong. Obviously this does not cut out all production costs, but it does drastically reduce them. Having research costs at all is suboptimal, but I don't see a way they could be avoided, so best to minimize.

Also, while I think that 66% marketshare for the Wii (if it ever comes to pass) should be a signal for developers to switch, the marketers will push back: they want their easy-to-sell Shinies (tm), and the Wii can't give them those, and they know it. They hold a lot of power over the developers: enough that I believe we won't ever see the Wii taken fully seriously by the third parties in this gen. A successor to the Wii might, even if it holds a similar place power-wise, but the Wii itself will not.