So its something I have been thinking about since this generation began. For the first time two of the three hardware manufacturers lost more money then they gained. It shows the fragile nature of the industry with Sony losing almost everything they had made during PSOne and PS2. With such heavy losses people began to suggest Sony might end PlayStation if PS4 fails in the same fashion as PS3 (Profitability wise) and others talked about whether it is in Microsoft's best interest to remain in an industry that they have only lost money in. Others such as share holders and industry analysts have called on Nintendo to bail on their first party hardware saying it is no longer an effective business.

With all this D00mZ talk I have begun to wonder which of the three stand to lose the most if their next generation consoles tank and the company is forced out of the hardware industry. Now this is something I think is interesting would the loss of PlayStation be worse for Sony then the loss of Xbox to Microsoft? Or would either of these losses match the devestating effect the loss of Nintendo consoles would have on Nintendo?

Discuss, who do you think stands to lose the most in the case that the company is forced out of the hardware industry?

My opinion below

I will list the three from most effected to least effected and give my reasons.

#1. Nintendo, Unlike Sony and Microsoft Nintendo is a video game software reliant company. The sales of their hardware directly improve the amount of profit they make off of their software, not only that but the companies royalties which it receives from third parties make up a huge amount of their profits. Up until 3DS Nintendo also relied heavily on hardware profits to maintain their profitability. If Nintendo lost their hardware divisions they would be screwed. Nintendo would likely fair a tad better then Sega who posted strong profits of 448 million USD in 2010. Nintendo in the past has profited in the billions up to five billion in a single year. These profits are reliant almost entirely on the fact Nintendo has consoles. Without consoles Nintendo loses 17% on each first party title sold, 17% that would have been their royaltee from each third party title sold and then any amount of profit that came from selling accessories or hardware. In the end Nintendo would never be able to post profits in line with their past again if they lost their console business. In the end they would lose more then any other of the three.

#2.Sony, Sony's SCE was one of the most profitable divisions of Sony at one point in time. Sony even talked about expanding the PlayStation brand to a personal computer. The division was insanely profitable, sure not as profitable as Nintendo but still insanely profitable. Sony also had the largest market share by far for two generations. If Sony lost PlayStation they too would lose profits from every first and third party game sold, then they would lose any profits that their hardware could have brought in. The thing that lessens the blow opposed to Nintendo, unlike Nintendo who's franchises can sell up to 25-million copies on their hardware in a good climate the average Sony first party game sells between 2-8 million copies. In fact with PS3 Sony showed that their franchises can't sell as well as the other companies first party games can on their hardware. Essentially by going third party Sony could likely double their sales which would make up for the loss of paying a royalty. However the third party income will be gone still and hardware profits also gone. But unlike Nintendo Sony will still have its many other divisions to keep the company afloat. PlayStations failure would not kill the company and if the division lost PS3 levels with PS4 it might be a division that drags Sony down. Making its loss less of a blow to Sony.

#3.Microsoft, Microsoft is in the best position of the three to lose their hardware manufacturing division. Why? Because Microsoft has already mentioned it is thinking down the line of merging Windows and Xbox into a single product. If Xbox failed as a hardware platform, Microsoft would simply move Xbox and Live over to their Windows operating system entirely. All of Microsoft Game Studios games would then launch on PC. Microsoft could continue charging royalties to developers who want to use Xbox Live and the Xbox part of Windows, while Xbox and the inclusion of all of the Xbox franchises would boost software sales for Windows. In fact Microsoft could also make more by licensing Xbox/Windows out to other hardware manufacturers for royalties. In essence Xbox could benefit Microsoft almost as much if not more by no longer having a hardware division. It would really help Microsoft keep Apple's computer business under control allowing WIndows to maintain a larger market share.

Nintendo obviously. If they weren't able to make consoles they'd be out of half their business, stocks would drop and things would be going very badly for them especially considering the 3DS is selling at a loss.

In gaming sense:

Microsoft in the games division not in the company sense

SONY and NINTY can still make game software

in profitability  sense out of gaming(in that case what te point of talking as this is a place for games not corporation profit):

ninty

sony

ms

Nintendo.