Yes, that is why they are campaigning heavy this holiday season with about 5 system bundles, a bunch of commercials and the PSVita on the horizon....They had a bad economic quarter, and they can't catch up to Microsoft...they have lots of work to do.

They ruled the first two generations so i guess these type of questions are bound to pop up. I will give you the short answer NO. Why drop out if they know they can sell?

PSV launch so far suggests that they took lesson from PSP and PS3 very seriously and will avoid most of the mistakes.

Also PS4 will likely be the first one to not inlude new storage standard (PS1-CD, PS2 DVD, PS3- BR) while opponents will have to upgrade theirs which will make Sony lot more price competitive than they were with PS3.