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Desertghost said:
"Sales" only interest fanboys for bragging.

I'm pretty sure that sales are a lot more important in Sony's view than power.

More importantly, I'm pretty sure the thing that Sony cares most about is profit. Since the consumer doesn't want to pay massive amounts for a console, for Sony to make a console with a lot of power, they would have to take a significant loss per console for the first few years. We saw this with the PS3 - Sony still hasn't made back the money lost in the first four years. That it's now starting to make a profit is good for Sony, it's one of the few parts of the company that is in the black right now.

And that's precisely WHY Sony can't possibly go for a highly powerful console in the next generation. Six years ago, Sony could afford to put a lot of money into the PS3. They don't have that money to spend any more, and they can't borrow it, either, due to their credit rating issue. They necessarily have to keep their gaming division in the black over the next few years. Even launching a new console is going to be difficult for them, as new consoles typically produce a net loss for at least one year, unless their price is above the manufacturing cost by a reasonable amount (as Nintendo has done with most previous consoles, the Wii U being a slight deviation from their usual approach).

We know that the Wii U is only somewhat more powerful than the 360 and PS3 (in total - I'm aware that the CPU is slower, but the GPGPU makes up for that). We can be pretty certain that MS, who have lots of money to play with and who are comfortably in the black even without factoring in their gaming division, will be going for the very powerful approach, and will likely be taking a significant loss on their new console for a couple of years, at least. Sony simply doesn't have a chance to have the most powerful console on the market, unless they try to wait until, say, 2016 (at which point, they might be able to edge past MS's 2013-2014 console without taking too big a hit).

Assuming that Sony does release no later than 2014, they have two choices, as a result of this, as management would immediately be fired if they put out a system that they knew would produce massive losses in their current circumstances.

Anyone who suggests that this is so long that they didn't read it is an idiot.

Option 1 is to release a powerful console, that is somewhat less powerful than the Xbox Successor (XS). This puts them in a tough situation - a console noticeably less powerful than the XS, at a comparable price (as MS can afford to take a much bigger loss), without the sort of brand recognition that the PS3 got to enjoy (the Wii now holds the brand recognition benefit, not PS), and with fewer exclusives outside of Japan. The only region that might keep them from completely folding would be Japan, and many Japanese developers seem to be supporting the Wii U quite strongly. Furthermore, due to MS's direction with Kinect, etc, many XS titles will make use of Kinect, and Sony only has the technically inferior Eye to keep them from losing functionality entirely.

Option 2 is to release a console that is somewhat more powerful than the Wii U, but well behind the XS. With Move being the more technically capable controller (although not yet used as well as the Wiimote has been), Sony would be able to attract superior versions of Wii U titles more often (touch being the one thing that Sony needs to provide some option for). With the one year delay and the lack of a full UPad to have to pay for, Sony would be able to afford to have a more powerful system for a lower manufacturing cost than the Wii U's launch price, resulting in the ability to potentially match the launch price with a visible improvement in power, while breaking even on every console sold.

Furthermore, Sony and MS first-party exclusives bear a lot more resemblance to one another than Sony's first-party exclusives do to Nintendo's. By focusing their attention on Nintendo, Sony ensures brand differentiation from both competitors, better diversity of games than the XS, mostly better-quality multiplatform games than the Wii U, and a greater chance of keeping their Japanese development support. Meanwhile, developers will be forced to support the Wii U and Sony's new console, because the XS won't be outselling both combined from the beginning, and dev costs for XS games will be higher. Without the broader base created by having multiple platforms, developers will only put their biggest franchises or their shovelware on XS, as other titles won't make enough money.

Will so-called "hardcore" gamers choose the XS? Probably. But just as so many of them bought a Wii to make "PSWii" or "Wii60", as the old meme went, so too will they choose one of the lower power consoles to complete their gaming experience. If they go with Option 1, the "hardcore" will almost certainly choose the XS and then the Wii U as their second console, as Sony's console will get mostly the same games. If they go with Option 2, they'll probably choose Sony's new console over the Wii U as the second console, as it will be seen by them as the "superior" lower-power system, rather than the "inferior" higher-power system.

Note that I'm not saying that Sony will "win" if they do this. The net result of Option 2 isn't immediately obvious, unlike the net result of Option 1, which is not good for Sony. But it does give them a real chance to return to financial strength in the gaming industry - the ability to make a net profit from early in the generation, as they achieved with both the PS1 and PS2 (which were both the weakest systems of their gen, or close to it). Indeed, I would argue that this is the only way that Sony manages to retain ownership of the "PlayStation" brand and product - otherwise, they would likely find themselves in such a financial hole, they'd have to sell off their gaming division in order to stem the financial bleeding.

In fact, if I were in Sony's position, I'd consider looking at MS's idea of allowing tablets to connect with the 360, and adapt the idea... by having smartphones connect with their new console, as well as the Vita. While only a relative few own Vitas, and Tablets, while gaining in popularity, are still far less common than smartphones, smartphones themselves are almost ubiquitous. This would allow Sony to further improve the feature symmetry with the Wii U, to enable better multiplatform development with the Wii U, and thus help Sony to further appear as the best option to many people.