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WilliamWatts on 11 January 2010
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GreyianStorm said:
WilliamWatts said:

All that doesn't justify the idea they would knowingly give up several billion in what seemed to be pretty assured profit.

Logically it makes sense that they believed that the PS3 would sell better than it did at launch and the competitors, especially Nintendo would sell worse than they did. It doesn't make sense to assume they are still on the same plan they had at launch. The PS3 is a calculated risk gone wrong but definately a calculated risk they believed they would come up ahead on even if hindsight says otherwise.

@Red Part: Depending on what they thought was possible, they may well have considered it worthwhile to sacrifice the billions of the Playstation brand. Considering that the maximum possible number of consoles they would have deemed themselves able to sell would probably be ~150 million (at the max), they probably saw leadership of the TV and Blu-Ray sectors as far, far, far more profitable (home consoles make up a tiny market compared to worldwide TV sales, or current DVD sales).

I agree that they most likely expected both the 360 and Wii to not perform as well as they did and they probably are not on the same plan they originally were, but that doesn't mean that they threw away guaranteed billions (which, seeing how well the Wii has performed, may not have been guaranteed had they only tried to match the 360's specs and keep costs down) for nothing. They could have made far, far more had Blu-Ray taken over quicker (and it could yet become the market standard, which could replace the billions lost on the PS3 in losses + lost profits).

The profit from their games division made up a significant proportion of their overall profit and recent losses. Relative to TV and Blu Ray profit it still makes up a larger slice of their 'potential' overall pie and its something which doesn't rely on too many factors outside of their control as in with Blu Ray its a consortium and they aren't the only major stake holder and as with 3DTV they aren't the only 3DTV so competition limits their profitability. Consoles are a micro-monopoly and the potential profits can be far greater.

I am willing to bet quite a lot that they believed honestly that they could release a PS3 for $500-600 or Euro and blaze a trail through both the console and media markets and that their profit would be higher than ever. If you look at the level of investment and statements before and during the early part of this generation they were drunk with success and they over-reached. They bet on being number 1 in sales for consoles, the PS3 still selling for $400 + (because it was that good to them) and massive Blu Ray royalties. Its a pity that the Champagne is still one ice.

I don't say this because I hate Sony, but because I believe its a realistic interpretation of the events of this generation. I don't mind if you disagree and we can continue to discuss this if you want.