So, uh.

Where would Fumito Ueda go?

I hope he would start his own studio. That would be pretty cool. I wouldn't mind Nintendo hiring him, either.

Sony is far more capable of sustaining losses in their gaming division even for multiple generations ( let's also take into consideration that the $3.5 billion figure is for this generation alone , the previous 2 Sony consoles were both succesful ) , Sony has various sources of revenue whilst Nintendo generates revenue mostly largley from gaming.

Sony can pretty much stay in gaming as long as they want to , but wether the shareholders would like that or not is another issue.

Oh and I'd proly just stick with MS ( assuming they continued to support the traditional gamer).

no sony won't drop out of the console war. they just getting started. sony still has time to make a serious comback aganist nintendo wii and xbox 360. they need to release the ps3 slim so they can make the ps3 cheaper. advertise a lot more, and the fact that they are still competing and still in the race despite the fact their killer aps are just starting to come out.

im hoping there killer aps live b3yond its hype, 2009 and early 2010 will determine who wins the console war. MS will be on a software slump in 2009 cause their upcoming exclusives aren't must have for a long time, 2009 is sony chance to take advantage of it

Thats why I stated that there would be no more loss-leading strategies. If nintendo had lost 3.5bln lastgen, they'd have been awfully close to collapse. Sony is (or used to be) a  bigger co. so they'll survive.

Sony's gaming division was the most profitable in the past, you guys really expect it to get canned now? Sure they lost a lot of money but the fault came from within and could've been controlled. If it was just because of competition, I'd say they're more likely to pull out but this is really a classic scenario of "learn from your mistakes"

Seriously guys I do not think we are addressing the issue that matters, here.

One of the three best directors in the industry would be looking for a job.

And I wouldn't need to buy a PS4 to play his games.

Is all this money Sony lost everything, such as cell Development, and Blu-ray development included? or just the basic PS3 costs that they were expecting to make back?
Because the Cell and blu-ray weren't just for the PS3 use, so shouldn't be taken into as much account imo.

Also from the way Sony is, I'm almost thinking they knew they were going to lose, they're kinda setting everything up for the PS4, which I imagen will be more of the same, with a more wii edge...
Sony so far have managed to take all the great nitty things are make them far more usable, shock, and analogue etc.

Very true, that said the fact Sony have lost so many potential customers can possibly hurt them next gen. Ignoring the fact the Gamecube was dead last now the Wii is first (mainly because it has opened the gates to gaming for many people)

Nex gen unless Sony do something similar a lot of the PS2 fanbase that migrated to the 360/wii this gen will stick with M$ and nintendos offerings. I think if Sony want to do well next gen they need to be innovative and bring something truly fresh and original to the market.

If they did pull out some other company would probably take their place. But it won't happen.

Relax PS3 is doing fine and it's tecnologically advanced enough so that it will be able to compete with Wii HD and Xbox 720.

Sony is so deep in the red right now that they will have to keep PS3 out for 10+ years at a minimum. I don't think they will pull out anytime soon but if they did, I would not care.