well its true the reason why its so expensie is because if they put a bid on anything microsoft outbids them no matter what.

Sony said they stole Nintendos playbook at E3, they explained how they were concentrating on 1st and 2nd party. That they would have the most exclusives per any other system, they continue to buy studios and add people as makingmusic has mentioned. Its worked well for Nintendo why wouldn't it work for Sony?  Isomaniac for example is three times the size it used to be, which explains how they can pump out Ratchet, Warhawk and Resistance titles. Ted Price president of Isomaniac is great friends with David Jaffe and helped him set up his own studio Eat Sleep Play. Oh and Sony has signed an exclusivity contract with them for 6 games (which at 2 year development cycle = 12 years) and of course then Jaffe would renegotiate for more money. Sony obviously wants to turn Jaffe into Ted Price2 and Jaffe doesn't seem to mind signing away 10 years of life to Sony so all signs point to it happening. 

Sony has shuttered two games The Getaway and 8 days I believe but instead of firing people they have shifted them to other games already in development. Would they pick those 2 IPs back up? Maybe. Anyway Sony said this at E3.

If they stole Nintendo's playbook, they did it way back around 2000.  They've had a very strong and ever growing first party since the end of the ps1 era.  It's just always been overshadowed by a plethora of third party games.

Arguably, Sony was focusing heavily on it's first party since the very beginning.  After all, they were entering into battle against two juggernauts known for their first party IPs (Mario and Sonic), and they probably expected fiercer competition at the beginning.

Sony's early efforts to build a first party to call it's own can be seen through the signing and eventually aquisition of Naughty Dog (the creators of Crash Bandicoot, intended to compete with Mario and Sonic - too bad they sold him to Universal later on), the creation of Polyphony Digital (know for Sony's biggest IP - Gran Turismo), and others like the sadly now defunct Legend of Dragoon team.  Team ICO was also formed during the ps1 era, though Ico was delayed and ultimately released on the ps2, after a whole four years of development time.

Very true. I very much enjoyed Legend of the Dragoon. I thought the idea to sell Crash was because the Naughty Dog team was tired of him from all the sequels and Crash Team racing. I expect Sony to next concentrate on acquiring a RPG developer. They seem to be working on every genreFPS: Guerilla+Isomaniac, Racing/Driving: Polyphony Digital, Evolution Studios Action/Adventure: Naughty Dog, Zipper, Isomaniac Weird stuff:SCEE (Eyepet, Singstar) etc. Really thats all they have left to conquer aside from RTS's, I expect the offer will goto Level 5 for Sony has kept them busy with WKC and Jeane D'Arc. I laugh whenever I read how Sony treats developers badly. It seems they just buy them and throw money/resources their way after all look at team ICo. lol  

Yeah, Sony generally tends to focus on it's weakest genre at the time (for example, FPS at the end of last gen with the purchase of Geurrilla and Zipper), so I fully expect them to tackle the JRPG genre next, probably going after Level 5 first.

Also, they didn't buy Team ICO.  It was formed internally, and at the beginning of the project, Fumito Ueda was nothing more than a cinematic animator.  His rise to the top is really pretty cool:

From NeoGAF:

I think everyone is going off on a tandem. When Sony is having difficulty securing exclusives due to cost. Then it is a reasonable assumption that money is a real issue. Where is the logic in saying their strategy should be to purchase actual developers. When purchasing developers is far more expensive then purchasing exclusives. That is not a solution to the problem that is an exacerbation.

You do not solve a problem by making the problem worse. When you cannot afford to spend a moderate amount of money you sure as hell cannot go out and spend a massive amount of money. Unless you think he is just bitching to hear himself bitch. Sony obviously has some financial constraints, and that is understandable their game division bled a lot of money over the past year and a half. So a rational human being will concede if they cannot spend twenty million a quarter they probably cannot afford to spend a hundred million dollars on acquiring a new company with all the associated costs.

There is efficient and then there is stupid. Spending far more then you can afford, because you cannot afford something is the definition of stupid. Especially if your trying to solve an immediate problem rather then a long term one. What David Reeves is talking about is being more efficient with what he has. Like a intelligent person would do.

Sony cannot afford to go toe to toe with Microsoft, and there is even a question whether they could afford to go after these high end exclusives without Microsoft paying for them in the first place. What they can afford to do however is be frugal with their money and, stretch it to get the most. That is why they are giving small developers small sums of money to help them get their games off the ground. Doing that they may actually get half a dozen small titles rather then one huge title. To go against the six huge titles Microsoft will have.

No its not a winning strategy it is a sustainable survival strategy. Which is the right mindset to have. We need to stop thinking of how Sony can somehow win the exclusive wars, and think about how Sony can survive said wars and financially recover. Many of you would have Sony coughing out another half billion buying out small developers to get five exclusive games over the next year. That is not brilliant that is deranged. Especially when Microsoft will respond by spending less to buy thirty exclusive games.

Wouldn't that be a blessing for Sony.

@Makinmusic: People have a short memory, but here:

http://www.gamesindustry.biz/articles/scee-to-lay-off-160-employees

http://blog.wired.com/games/2007/04/sony_american_j.html

Sony definitely has the right mindset. It's much more worthwhile to spend your money on funding and aquiring private developers who will make games specifically for a system that will show off its potential than to moneyhat big-name publishers when they could change ship at any time.

i think they are making the right decision on this one.

I would not say it is the right decision as much as it is the lesser of two evils. Remember at some point next year these decisions are probably going to bare some bitter fruit. Microsoft is probably going to get its hands on some well known franchises or titles one would rather not lose.

What really chafes is we have exactly no clue what Microsoft is going for or even what is that far off on the horizon, but if Sony isn't going to seriously contend for them. Well Microsoft is also probably going to get themselves some good bargains. That is the weak spot in this strategy. Though necessary Sony will be conceding some prime real estate to Microsoft.

That means that theoretically Microsoft should see an upswing in major third party exclusives. Will be interesting to see how some in the community respond. Anyone have any major third party franchises in mind. For me it is late and my mind is drawing a blank about what is exactly left this generation.