Being that Nintendo breaks with conventional thinking when releasing hardware constantly, I think there would be a massive hole left in the market if they became a software only company; in contrast, I don't see much of a hole in the industry if either Microsoft or Sony became software only companies.

With that said, I think the industry is healthiest when you have multiple strong companies doing very different things; and rather than encourage a company like Sony to leave the market, I would actually call for them to try to stand out in ways other than processing power.

Ahh, fair enough. I suppose when thinking about it that way, it does start to come a little more into focus what he's trying to say. Thanks!

But why? What if Microsoft followed this advice too. Suddenly Ouya would be very popular lol

This is one of those backhanded articles whose headline says one thing while the article says something totally different.  Sounds like he's making the argument that SCE is just too damn good at what it does to be relegated to struggling in third place, so they might as well take their ball and go home if they can't be #1 every generation.

Couple points I want to counter here...

1: "Can you imagine the disbelief die hard Gears players would feel if they had the chance to play Uncharted and, in the process, realize that Epic games and Cliffy B did not create the 3rd person shooter?"

Ummm... first off Epic never stated or even insinuated that they created the 3PS.  Plenty of other 3PS games came out before it like SOCOM, Freedom Fighters, RE4 just to name a few.  They did however popularize it to the point that it's now on the same level of the biggest mainstream FPS franchises.  Secondly... I wonder if the author realizes that Uncharted came out a year AFTER the first Gears game.  The quote seems to suggest that he thinks it was Sony / Naughty Dog who created the 3PS.

2: He then goes on to compare Killzone and GT to Halo and Forza, and saying that if they were all on the same platform (Sony's), then these Xbox exclusives wouldn't be held in such high regard.  This guy loses all credibility right there... comparing Killzone to Halo???  Are you f'n serious?!?  You can certainly make that argument between GT and Forza (though I definitely think Forza would give GT a run for its money since it takes like 4-5 years for a new GT game to come out and just 2 for Forza), but Halo???  If Halo had come out on the PS2, this would be Sony's #1 exclusive killer app, and today games like Uncharted and Killzone would be afterthoughts instead of premiere Sony exclusives.

3:  "While Sony does their own fair share of IP milking, they’re among the biggest risk takers in the industry when it comes to backing and publishing unique titles."

Yeah... because when I think of risk taking and unique titles, the first thing that comes to mind is Sony's big holiday title, the cumbersomely named and shameless ripoff PlayStation All-Stars Battle Royale.

Good thing that Sony is taking risks by backing and publishing unique titles like Bayonetta 2 and The Wonderful 101 though... oh wait.

4:  If SCE were to go third party, sure they'd shake things up a bit initially, but in no way would they threaten other major publishers.  If anything, many of Sony's franchises would end up like SEGA's... struggling to find a stable home while no longer holding the weight and prestige they once did in the industry since they would no longer be backed by dedicated hardware.  As if putting Uncharted or GoW on the NextBox would magically slow down Halo, Gears and COD sales, or putting Jak, Ratchet and Sly on the Wii U would slowdown the Mario Machine that is Nintendo.

Huge flaw: Sony games don't sell nearly as much as other 1st party developers. I would say taking HW to 1st party SW sales, PS3 % would be very low. Nintendo would obviously be very high. And MS would be a mix.

No, Sony leaving the hardware business WOULD NOT benefit gamers. There is a reason I stuck with PS3 this generation.

1a. I don't like Microsofts business practices.
b. They are new at making hardware, hence the RROD epidemic.

2a. I'm not too fond of Nintendo. In fact they are simply too Japanese for my taste.(Keep in mind that I am a big fan of anime)
b. Nintendo makes "good enough" hardware marketed through gimmicky controls.
c. Their focus is clearly on kids and families which leads them to make stupid decision like Friend Codes.

So why do I support Sony?
1. They make amazing state-of-the=art hardware.
2. They have the amazing 1st party studios to show it off.
3. They care about the gamer. Free PSN being a prime example.(Free online gaming is a RIGHT, not a privilege)

Anyway if you look at the sales charts, the highest selling games on PS3 are actually 3rd party. If Sony didn't make the hardware they publish their games on, they would make a lot less money. I'm not even mentioning the fact that Microsoft and Nintendo are not going to play nice with Sony if they ever became multiplatform. Sony would get crushed. A game like Uncharted would never sell on a Nintendo console, and a game like Killzone would be overshadowed by Halo.

Hardware is still a profitable business sector. PS3 didn't do it well, but it is selling well now and having hardware allows for sale of accessories. Plus, how do you expect them to sell software? They take a cut of 3rd party sales. Going software only would severally reduce their software sales numbers. Hardware is making their software profits. They risk it by eliminating hardware from the equation, besides, Sony is moving to bring their software business beyond the realm of their own hardware already. They don't need to get rid of hardware to accomplish it.

Whoever wrote that article seems to overlook the fact that the sales of 3rd party games is MUCH larger than that of 1st party games on the PS3.
So any increase in 1st party sales on Xbox 720/Wii U would be offset by the loss of all the profits they are gaining from the 3rd party games. PS3 should be profitable by now, so those are profits they won't have. PSP is profitable and PS2 is still selling. 

Playstation is an iconic brand. Without Playstation, millions and millions of people would never have played any games. Sony brings affordable gaming to low-income families in 3rd world countries with the PS2. Would Microsoft ever do that? Nintendo? No. Sony cares about the gamer.

BTW, PS4 could easily be sold at a profit from Day 1. Sony could just make a console equal in power to a Wii U, and it would sell purely based on better 3rd party support, PSN and brand recognition.

Yeah, they do that based on care!

Seriously laughing here!

Stay mad bro. Look at how fast Nintendo abandoned the DS and how they let the Wii(once king) fall so quickly.
Sure, as hardcore gamers we want new hardware, but not everyone can afford it. This isn't just about 3rd world countries, even in America hundreds of millions of people live from paycheck to paycheck. Gaming is a luxury to  many.

Let's see if Nintendo is still selling the Wii or DS 5 years from now. We'll see.