SONY lost 3.31 Billion on initial PS3 costs; May never see that money back.

[shams]

This is exactly why Sony are completely changing their gameplan, to be a lot closer to what Nintendo does.

Sony have never been strong with software - hardware has been their focus, and they make money from 3rd-party fees (manufacturing) on their consoles. But now with the PS3 in so much trouble (chances of it selling anywhere as near to what the PS2 did 3rd-party software-wise is probably zero now) - Sony need a new way to make money.

Step in: software development

Sony's new strategy is to develop and publish as much in-house software as possible. New IP stuff, as its the IP that builds the value over a long period of time.

(looking at the current weekly charts - Sony is ranked 9th as publisher - with their best title being Prologue at #45)

It will take a few years for this strategy to play out (as software dev is a slow process) - and its also a risky one. They do have the advantage of platform holder (gives them financial, technical & marketing advantages) - but we all know that PS3 software dev is an expensive process (MGS4, Killzone II, etc..) - meaning that the titles have to be considerable hits to work out.

...

Its ironic - but probably the best thing for Sony to do NOW would be to develop & release a number of quality PS2 titles. They could use the profit from these to bankroll their PS3 titles, and it might slow the momentum of the Wii.

They are in a really tough spot - primarily because of MS. MS could blow a couple more $bn on price cuts/buying software a lot easier than Sony can afford to ATM.