Ill comment on Sony first then on my concern for the gaming industry second.
I knew this quarter was going to be bad with the strong yen, weakness in their TV, phone and pc business but for SCE I though they would have a better showing. The month of December threw the gaming industry on its head.
The bulk of the losses are contributed to the exit of the LCD business and the environmental disasters from the earthquake and flooding Thailand (~140 billion Y), both were pretty much one time events, so Sony will have easy comparisons this time next year. I still see multiple challenges as the Yen will still remain strong against Sony biggest trading partners, the secular downturn I see in gaming wont help, competition from their Korean counterparts is only going to get worse, new iphone coming out this year all are going to hamper Sony ability to gain traction for their products. They lowered pretty much everything across their product lines (except TVs which I find funny), cameras, phones, PS3s, computers, this isn't indicative of a Sony only problem but a problem for all Japanese manufacturers.
As for gaming itself, there is no doubt in my mind that the current era we are in is a Microsoft dominated one, they have been the most consistent video game company for the past three years or so and will be able to dictate gaming on their terms.
After looking more closely at December for multiple electronic retailers, amazon, bestbuy, Nintendo, Microsoft and Sony it appears that, at least for gaming, has been some kind of downward shift, almost a secular decline that the gaming industry will be far from getting out of. Even with the Vita, 3DS and Wii U coming online, from a sales standpoint it will be down next year (lower price points and not enough units sold), and most likely for the next couple years. I hope I'm wrong though. Crazy times.
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