I'm going to give a quick lesson in economics to MikeB, Captainpreferences and nine0nine.
Sunk Costs: Sunk costs are irretrievable losses (investments) made at the beginning of an expansive venture (in this case, Microsoft's investment in consoles). Economics dictates that a Chief Financial Officer should NOT take sunk costs into account when deciding the future direction of a company's venture.
The reason for this is simple. The money has already been spent, no action can retrieve it. The best possible course of action a company can take is to examine the current cash flow situation, current deployable assets and finally future growth and profit opportunities.
There is no conceivable reason why a competent economist would instruct Microsoft to leave a growing industry in which they are currently profitable and have large amounts of available assets (physical in terms of manufacturing facilities, but also in terms of developer and publisher relationships). If there ever was a reason, it would NEVER be that they have already accumulated too many sunk costs.
Furthermore, anyone that thinks Sony will launch the PS4 more than a year after the Xbox 3 is a fool. The Xbox launched a year after the PS2 and look what happened. The PS3 launched a year after the Xbox 360 and resulted in the likely permanent crippling of Sony's gaming dominance. The only exception is the Wii which adopted a disruptive strategy, the kind that only pays off occasionally.
starcraft - Playing Games = FUN, Talking about Games = SERIOUS
