Here is how it all happened...
Event 0: Nintendo massacres the competition in the 1st party exclusives department, and survives gens 5 & 6 off in-house effort.
Event 1: MS steals 3rd parties from Sony in 7th gen.
Event 2: MS has a few shooter hits on their hands with Halo and Gears of War.
Sony reacts: Mandate all studios to develop exclusive, high-production shooter-style games to compete with MS shooter offerings and counterbalance 3rd party exclusivity disparity, as well as attempt to meet Nintendo by developing new IPs they could own from there on out.
The Mistake: Not relatively managing resources. Certain studios should have been mandated to create low-production but high-appeal content so as to spend less money and create smaller-caliber games which were to foster sales and sustain the business. They also threw all their eggs in the nitty-gritty basket (safe an exception or two).
Consequence 1: High production costs means chance to waste resources on features with low ROI, as well as general non-feasibility of project against a chance of success probability factor.
Consequence 2: Less money for marketing = lower sales and smaller ROI, as well as consumer confusion.
Consequence 3: Theme cannibalism. Games like Killzone and Resistance ate each other up due to offering a very similar experience and theme.
The Bottom Line: Sony needs to close down certain studios or reduce personel, attempt to meet the same objective of creating new IPs for their IP bank, but offering more appealing experiences with smaller production value. They need to diversify and offer experiences that are very fresh, not simply new. They also need to look into creating compelling content off a low production cost setup. Their sales expectations should diminish for certain types of content, in that proper resource allocation can ensue. Lastly, their marketing should be efficient and accurate, if they have any more money to do so.
My, what happened to the marketing juggernaught we had in the PS1 era? Crash Bandicoot was not only a good game, but it was massively marketed. So was Final Fantasy VII, and it was a 3rd party game (massively funded by Sony mind you)!
