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Saying sony will terminate PS brand is ridiculous.
Reasons:
1)iSupply also expects them to break even on production sometime this year. 2) IPs are the most profitable market for sony atm, which they also said they are going to be focusing on.
3) Gaming is expected to lead the tech sector in 09.

All signs point to Sony pouring more money in game development and axing a bunch of needless, soon to be outdated or unpopular tech:

UMD movies
CD and DVD plants
Ericcson deal
Sony walkman + discman

Note that all of these will be heavily region restrictive and will continue to be manufactured in many areas.