Microsoft and Sony are destroying their (and each other's) gaming business

[Dodece]

Most posters on this site do not appreciate the concept of war by attrition. The goal of such a contest isn't to win with strategy or cunning. The goal is to use your size to deplete the opponents resources. Usually in such a contest its the side with more resources that wins, because the battles are fought in such a way that the damage wrought on the enemy is equal to the damage sustained. The only question usually is which side will succumb to the damage first.

Unfortunately for Sony they have been losing this war this generation. The damage inflicted is not in line with damage accumulated. To match the movements by Microsoft they have had to make greater sacrifices then Microsoft has had to. Which only makes the opponents less intractable, and only fuels a arms race. Sony is sacrificing three or four for every one Microsoft is sacrificing. Sony desperately expends resources to obtain parity, and Microsoft smells blood in the water.

The carnage will probably only get worse. Sony has already committed so much by liquidating assets, and losing massive amounts of capital. While Microsoft has every intention of insuring that the trend continues unabated. Which means Microsoft is probably never going to let Sony be profitable on their hardware by using their longer production run to continually push down prices, and they are probably going to keep purchasing exclusives forcing Sony to match them.

What disconcerts me, and I am disturbed that it does not concern many on these forums is that Sony is steering a coarse towards a Pyrrhic victory. A victory that is so costly to the victor that they can no longer justify continued combat, because they have exhausted the resources to do so. Sony can ill afford to lose so much and gain so little. Especially since at this point the victory will be terribly hollow they will not remove Microsoft from the field, and both their rivals will leave this generation with real tangible benefits.

Before anyone says BluRay royalties let me say this. Sony could have gotten by with a pittance of what they have lost on the PS3 moving the technology by merely selling cheaper stand alone players. They could have delayed their console until the technology was more affordable, and they would not have had a protracted war in the first place. For what they ended up losing on the first generation of PS3 hardware they could have had two hundred dollar BluRay players on shelves at the end of 2006. They mutually handicapped one another. The player made the console too expensive, and the console made the player too expensive.