It's all very well discussing unit sales, projections and price points, but in truth the seventh generation of video game consoles has already been decided.

Microsoft and Sony are massive corporations with over forty billion dollars of annal revenue and massive profits. In contrast, however, their game divisions each show significant and sustained losses - Microsoft ever since it entered the console market and Sony since the PS3 started to lose them $200 on each one sold and the PSP was a virtual flop against the DS.

This means that if it weren't for their other business, both companies would be dead and bankrupt already.

Nintendo, on the other hand, has always turned a large profit and has had their share value (and therefore how much money the market expects them to make) triple in 18 months due to the DS and Wii.

Result: If the market was fair and Sony and Microsoft couldn't afford to lose billions of dollars every year just to stay in the game market, Nintendo would be the only major competitor left.

I believe if sales continue their current trends Sony and Microsoft will give up and pull out of the console market altogether. I see no financial reason to stay in it for either company.

"I believe if sales continue their current trends Sony and Microsoft will give up and pull out of the console market altogether. I see no financial reason to stay in it for either company."

I hope not,only one company in this (or any) market doesn´t bode well....I think they´ll still be around when the 8th gen comes.

Well thanks for clearing it up. We should just close down the site till the next gen and track Nintendo sales since they will be the only console on the market.

I didn't say that. I said they ought to be the only console on the market based on simple economics.

Software sales, also lower manufacturing costs and obviously changes in the amount of consoles sold could alter your simple economics very easily.

PSP a flop vs the DS? Wow, 20m sold is flop?

you lost credibility with this post when you said that.

Meh, I was going to say something but I think ckmlb and ssj12 already said it all.

Why would Sony close down? You know people are saying stuff since Sony lost 2 billion mostly on the PS3 but think of it this way. If the PS3 didnt come out they would still have lost a lot of money because no one would be buying Blu-ray DVDs.

And just to put things in an easy perspective: movie theaters. Movie theaters make no money at all on ticket sales, in fact, there are theaters that lose money on ticket sales. The place the theaters make all their money on is through the concession stand with all their high prices and crazy combos. Think of a company like Sony as a movie theater with the tickets being the console and the popcorn with extra butter and the large diet soda combo being the games.

simple economics isn´t everything,Game_Boy,there are lots of other things to take into account...yes, companies´ ultimate goal is to make money,but how they get there is another story,it envolves much more than 'simple economics'.