7th gen is a huge wake-up call to Sony

[xman]

TheSource said:

I dont know, PS3 is probably going to top 30m in Europe alone, and its still got the potential to hit 20m-25m or so in the Americas. Its never going to be the gravy train PS2 was, with 145m consoles shipped in total from 2000 to 2010 and 1.55b games or whatever shipped but PS3 might still move as many as 750m games depending on how high the hardware gets. I'd go 60m to 75m lifetime for PS3, with certain markets resembling DS vs. PSP in Japan late in the sales life of PS3 and Wii.

The problem for Sony is that Nintendo used to profit over a hundreds of millions to billion of dollars a year in the 1995-2004 period when they sold ~20-25m consoles + portables at their best and had publishers ship ~80m-130m games per year on their systems. Now, Nintendo sells ~60m consoles + portables per year, and has publishers ship 350m-400m games per year on its systems. The amount of content (games) shipped for Nintendo systems is higher than anything Sony ever achieved with its systems (mainly due to Sony never having a portable before 2004) and Nintendo achieves the record volume at higher margins, which just makes them more a more formidable foe than ever.

That "weak" Nintendo of 1995-2004 was able to come back and obliterate Sony's game-division profitablity records ($3b in a year vs. $1b or something), total software shipped for manufacturer records (~390m vs. 270m) and total videogame systems shipped in a year records (58m Wii & DS in the year ending March 2009, compared to 37m PS2 + PSP + PS3 in the year ending March 2008).

So the revitalized Nintendo now sells more content, earns more money, and sells more machines than Sony ever had, and its hard to imagine Sony pulling off a similar rebound in the global financial crisis when there margins were never as good as Nintendo's to begin with, mainly because Nintendo profits on hardware while Sony loses alot on hardware, at least initially.

The current Nintendo is the company rediscovering what it made so powerful in the first place

Basically Nintendo follows one rule PROFITAILITY even when they dont sell a boat load of systems they make money.  I think MS and Sony have learned from nintendo the next generation is going to be interesting.