Last gen they were saying the same thing about Nintendo losing money as well,remember? People were wondering if Nintendo could even afford to join the new gen.

Yes and when I was a kid I remember someone jokingly saying "at this rate, Nintendo will have to start making controllers out of cardboard". It's the same crap over and over.

The funny thing is Nintendo rarely ever fails to turn over a profit.

Sony is in no real danger either. I mean look at how they turned around the PS3.

As a tech manufacturer they need to drop the prices of their hardware and revamp their logo and designs. The PS4 is a definite though. Lets hope they make this a more marketable and affordable console. If they do they will have a great start.

First of all: I think Sony will make it. They are in trouble but at least SCE can get out of that. That being said they will need a different strategy than an arms race with Microsoft. I think it's really telling what Sony did this year - or rather didn't:

- They did not cut the Vita's price even though it is in deep trouble
- They did not cut the PS3's price even though a cheaper-to-produce model was released
- They closed down several studios

Sony has always been very aggressive at dropping prices and undercutting its competition. They simply can't do this anymore. The strong Yen really came at the worst time for them, a time when they were already in trouble.

Usually Sony's strategy in the gaming market is to gain market share by undercutting the competition at first and regaining the losses later. But this time they can't lose money on the console for the first three years because they've been in the red for a long time now. The strong Yen makes it even worse and Sony's current credit rating doesn't help, either. On top of that Microsoft is in a very strong position to sell their next console at an initial loss.

The Sony of 2006 was able to lose $200 on each PS3 sold and still cut the price by $100 a year. The Sony of 2012 can't do that. They'd have to keep the price up longer. This is exactly why Nintendo dropped out of the graphics race in 2006 and developed a disruptive product instead: They had no chance to outspend or undercut their competitors and they knew they would lose that race. Sony is in the same position now but unlike Nintendo in 2006 they don't have a solid financial foundation and because of the strong yen they might have to release a weaker consoles than Microsoft and charge a higher price for it (the PS3 was always said to be slightly stronger than the 360, it had a Blu-Ray Player and came with a bigger HDD).

Sony's position is not unlike Sega's when they released the Dreamcast: They had lost money and market share with their last console and they had to compete with a big, financially robust competitor. That's not to say Sony will share the fate of Sega, of course. I still think they'll make it. But we shouldn't act like Sony was all fine and ready to fight in an arms race with Microsoft next gen.

Sony's best answer to this is not an arms race with Microsoft but the same thing Nintendo did: Looking for blue oceans or releasing a disruptive product that competes on values other than power and graphics. In direct competition the bigger company will almost always win because direct competition is a race of resources while disruptive innovation is a race of values.

Game to game offcourse GTA is bigger. But Madden keeps millions coming back for more every year. And well, sales of a franchise over the course of the gen does determine which one is a bigger franchise. You cant tell me one franchise is bigger when it sells less and generates less money......

Game per game is one thing, but im talking franchise vs franchise. And in that regard, as much as many gamers here dont like it, Madden is bigger then GTA for simply having frequency. But I wasnt referring to "moving" a console. Any game can be a system seller. Im alking about system carriers. And GT releases too little to be considered a carrier for an entire gen. 

Great post, congrats.

Franchise total sales is not much of a factor when it comes to carrying a console. It' s how large the game's installbase is. 

For example, imagine two different Franchises: Franchise A and Franchise B.

Franchise A releases a new game every year, for 6 years, with each game selling 3million units. That would be six different releases in total. That totals 18 million units for the franchise.

On the other hand, Franchise B only releases one game throughout six years. And the game sells 15 million units. Of course, that totals 15 million units for the franchise. 

Franchise A has sold 18 million units. Franchise B has sold only 15 million units.

Using your logic, Franchise A is biggger than Franchise B, and thus, is the bigger "system carrier". But that's not true. Let's look further...

The best selling game from Franchise A has only sold 3 million units. Thus, the fanbase of Franchise A is around 3 million units players. Therefore, Franchise A can only "move" about 3 million units, because that's how big it's fanbase is.  And to be more lenient for Fanchise A, let's assume there has been some overlapping inconsistencies, so let's bump Franchise A up to 5 million. So Franchise A can only shift 5 million units in hardware.

Now look at Franchise B. The best selling game from Franchise B has sold 15 million. Thus, the fanbase of Franchise B is around 15 million units. Therefore, B can move about `5 million units of hardware, because of how big it's fanbase is.

So, Franchise A would only shift 4.5 million units of hardware, at best.

While Franchise B would shift 8 million units of hardware, at worse.

And you would tell me Franchise A is better at carrying a console?  You have a stranger definition of "bigger"

Its the American football is more popular than world football argument that you're dealing it. You make a good point.

the thing is we don't know  what will qualify the vita as a failure, yes the weekly numbers are horrid, but if the vita is making a profit or atleast gaining the money spent on R&D costs a a rate that Sony can make even the slightest bit a of money back then who's to say it's a failure despite the sales numbers. the vita has nowhere to go but up imo, as next year(and years after) Sony will introduce pricecuts, and the materials to produce the vita will go down, and most likely we'll see a revision or two. I think it's okay to let Sony ride out the storm then do what nintendo did and cut it's price about 6 months into it's life. the games and eventual price cut are coming,  we've all seen smalls spurts of what the Vita can do when the games hit  the console, all sony needs to do is dedicate themselves to aquiring 3rd-party support to it's console while pumping out great 1st-party titels(like what they are doing with the PS3) yes it's sounds easier than what can be done, but all we can do is pray :p

While I can't disagree with this thread from a purely financial perspective across this entire generation, I think there are factors that are difficult to measure. To name a few by example; last generation the gamecube was my first console and later the ps2. This generation Nintendo lost a sale to me early on, and while they may have gained a new market, I am almost certain that market will be temporary and it will have cost them steady consumers in the future.

The same can be said for Microsoft's actions in the last two years chasing that same market at the expense of their core consumers. While Sony has also pursued this market, they have not done so in a manner that alienates their existing market. To me, Sony, moreso than the other two companies, have learned to appreciate their consumers (likely the direct result from the backlash of the $600 price tag).

Unfortunately, the effects of their actions will not entirely be felt toward the end of this generation since the lost ground was simply too steep to make up. I do not feel that Sony is in such bad shape for the coming generation or that MS and Nintendo are in any better shape. Honestly, I believe the ground that Nintendo and MS gained will be a double edged sword for them as many of those who purchased their console will have been left with a sour taste and more hesitant to purchase other consoles from them in the future.

Furthermore, their recent actions in maintaining the price of the Vita and PS3 hopefully demonstrate that Sony will not drive themselves into the ground with pricing in the future. This is a valuable lesson to be learned and will ensure that even if Sony doesn't return to dominance they will still remain quite relevant.