As far as an investment goes, Sony is a mess and has been a mess for quite some time ...

This isn't a comment on the quality of their products, but is more an observation that in almost all of their markets they're spending more money chasing after fewer sales because they're facing stronger competition from more innovative and/or inexpensive products; or the market has fundamentally changed and Sony has yet to adapt.

Since they're so diversified your money is likely safe, but you will probably see a much better return by investing in an index fund.

Here's what I don't get: if an MMO Dragon Quest is a bad idea why would it affect SON¥? It should 'shock' both SE and Nintendo, whose stock by the way, went up substantially. If SON¥ gets the 'shock' for losing a franchise, why would SE shares take a hit?

Even if I don't think Dragon Quest really had an impact on sony stock I believe this is how people are saying it works.

Lack of Dragon Quest on Sony's home console in Sony's home country decline in stock. Sony Down 
Dragon Quest going into online form that requires fees similar to Final Fantasy XIV. Square Enix Down

Two somewhat different events. Also Sony stock decling could be attributed to investors thinking Dragon Quest is coming onto the console, and since that didn't happen, they have readjust their stock forecast, which would make it go down. Again this is assuming Dragon Quest is the reason why Sony went down.....which it most likely isn't the attributing factor. Sony as a whole isn't in the best condition comparable to the relative market, thus the market and sony declined (Actually some would argue that Sony Brand is actually in a much worse state, but the true effects won't be seen until later). Square Enix decline however is most likely attributed to Online Dragon Quest game. 

SCE is one of Square Enix's biggest shareholders.

Oh my! I did not know that. How can SE take away such a prized offering from one of its biggest shareholders? Hmmm... now that I think 'bout it, SE's stock price drop might be a retaliatory measure by SON¥ for breaking their promise.