With every new generation, costs go up, staff increases, and salaries have to be paid. To make a full retail experience and without the luxury of being multiplat (more opportunity for income), you need to be really good to profit as a exclusive to one console.

Id imagine selling 500k-2 million lifetime as a exclusive wont cut it next gen.

like i said before if the PSVita is such a dead platform, why is everyone still talking about it? if the PSVita does not really matter in the Market why is people still talking about it, keeping it in the limelight? to make discussion? to make melt down's? I mean if it's So dead of a platform, where is the massive retail chain's refusing not to re order the system like they did the PSPGo? They want to give the PSVita another chance, yet another chance, and yet another chance How about yet another chance. Maybe Sony should just up and Quit making any game system because the sales are not where they need to be at a certain point of time, like for the PS3 was in 2006 and 2007 call it quits for the better heath of their company and the industry as a whole right?

remember Sony cut development studio's, and you are basing that on what? the idea of projected ROI - investment's? you and i have no idea how much each project cost's in its investment. and frankly they are not going to tell us, so it's just a guess, and if what you say is was true , we still do not have an idea how much of an increase cost's will go up right now let alone how much of investment $$ are going and where. Also many 2nd and 3rd games in a series would never have been made. because with margins like that trying to tell a a venture capitalist that you have to sell over 2 million copy's on a d@mn $60.00+ game would be quite telling about the investments cost involved in makeing that product.

and also

that depends on the investment of the cost's in the games production and ad budget's so what if Sony drop's the number of project's or budget's right?

Make a bunch of Mid tier Games but promote them as AAA seem's to work for Nintendo right?

I wouldnt compare Sony to  nintendo 1st party. Thats just a dead end. Basically, its just common sense that if the game isn't cel-shaded and is therefore polygon heavy, the costs warrant at least a million or more, depending on the dev cycle and marketing expenses. Next gen the costs will only go up. Sony is a more forgiving owner, they dont drop their studios after 1 or two failed attempts.

Boy, Sony fans sure get defensive....

We're all concerned about how dead it is. Pretty much means that handhelds are going away.

Btw Sony 2006 is not Sony 2013. Sony 2006 could afford to take losses on their hardware. Sony 2013 can't. They shouldn't kill it for fear of losing customer trust, but no one can deny it's in critical condition. 

You also have to consider the fact that Nintendo seriously wants to outright kill this thing, they don't want to give up anymore of a increasingly smaller market. They're playing hardball and Sony doesn't have the $$ to keep up.

I've never understood this but does cel-shading mean less dev costs? If so why?

geeeez.. I'm sorry to post an article from a respected mainstream website like Wired.com which has thousands of visitors a day and not from some random 16 year old internet kid with his own website and prays for hits from n4g..

I first remember this when Wind Waker was announced. Something about less data to allow the massive world to be created on the 1.5 gig Gamecube disk. Thought it was common sense that a cel shaded game just has less gigabytes then a game with the full polygon effect (aiming for photorealism) going on.

Just like Sony is right now right?

Come on ,

as for that , yet again that's not true at all, Look at Unity3D game engine cost's now v's Epic's UNREAL they both have Game engines with advanced functionaliity but one cost's more than the other. Expenses can go up but also Expenses can go down, we have no idea what each company is going to do in cost's for project's because every project is not going to be the same cost's.

So like i stated other than what you stated is just a guess on cost's we have not idea if they are going to go up drastic, but what we do know telling a venture capitalist you need to sell a $60.00+ game and you must sell 0ver 2 million copy's just to make a profit is not only problem in the logistic's of getting many productgion copy's in on time, but Margins are slim as is.