This here is a great explanation, SMcc1887 has a good one to, i make this questions because is hard to believe they are  improvising (but i think they are), it all seems as if they had a big plan but it didn't work so now the plan is to stay low the entire gen. Anyway i do have some concerns about the ps3's future since it is very hard for me to get another console.  the thing is this 17+ million ps3 owners( i don't know how many are gamers), have made a bigger and riskier sacrifice than the one sony is willing to take and seem unfair to me. Sony is talking about loss but ps3 owner have given them 3 billion dollars in hardware alone, i think maybe 3 billions in software so from the gamers point of view this investment becomes a lost if the system gets less exclusive and games with lower quality.

So if they have some giant plan B and this is it, not cutting the price for the holidays, delaying the best games(GT5 winter 2009??), no advertising, etc. where is the light at the end of the tunnel?????

To the dude saying am trolling, i own a PS3 and no other console.

SCE strenght is to use the know how of Sony Electronic division to build an advance system ( from a technical point of view ) and use their own factory to decrease the production cost at a rate unmatchable for other company not in electronic business like Nintendo or even Microsoft and let thid-party do the rest ( large userbase and smaller contraints than classic gaming company like Nintendo ).

PS3 problem is that not only is over-enginered to try to battle MS funding and to try to impose to the market Sony's electronic products via Playstation brand but the videogames market hit a point were the technology offerings by Sony or MS has surpassed the market demands ( only a niche albeit large seems fully appreciate Sony and MS 's offering ).

This market condition opened a chance for a disruptor ( Nintendo ).
Nintendo played its hand relying on its own strenghts ( integration between software and hardware, large appeal of its products ).

Suggesting Sony to copy Nintendo on Nintendo own field is foolish like suggesting Nintendo to copy Sony on Sony own field.

Wait another 4 years or so, then lets see how well Sony's plan works. Sony understands one thing that apparently no at this site does, and that is this console war will be near a decade long battle, not a 24 or 36 month battle.

This: oha and same here... dev-kits... they represent an issue for most companys at the beginning of a consoles lifespan. Big companies ( read: EA, Activision/Blizzard, SE etc. ) get tons of them , while smaller ones barely get any...

Classic ps3 fanboy tagline...."Just wait until (insert date here)".

Arrogance. We were alot of people saying the same things 2 years ago, but Sony thought they had a powerful enough brand to get away with it. I'm very pleased that they didn't.

It'd be foolishness for Sony to try to make their own Wii Sports, Mario Galaxy and Wii Fit and compete on that level but if Sony wanted to follow some of Nintendo's business stategies then no.   Nintendo made a nice profit when in 3rd last gen whereas 2nd place Xbox lost 4b and even the PS2 never made the kind of $$$ the Wii is bringing in.

Sony's problem was there own arrogance.  They assumed they'd be a mass market leader again.  Just assumed it.  No plan in case that didn't happen.   Nintendo took a HUGE gamble with the Wii.  But even if it flopped then they'd still have made some profit off of it.  Sony should not have accepted the sort of losses the PS3 would bring, it's bad business but clearly they just didn't anticipate failure.

Answer:

Brand Name:
Sony is top most known brand. Psychology proves that the greater the brand recognition, the greater the product sells.

Blu-Ray:
Sony invested heavily in BR, more than any other company, and needed to win the format war in order to turn a profit. PS3 systems will turn the tide of the format war towards BR.

Fanbase:
Having such a large amount of sales for the ps1 and the ps2, Sony will be able to eke out numerous sales based solely on the success of previous generations.

Cell Chip:
PS3 will be the first time the cell debuts on a world stage, and demonstrates a monstrous amount of raw computating power. This will lead to both military and private contracts. As seen by the folding at Home project, PS3's have outperformed almost the entire world.

Home theater:
With not only the best next-gen digital video quality, but also next-gen sound quality, The PS3 solidifies its place among Home theater enthusiasts, keeping Sony in the Living Room, where it wants to plant a flag.

/end thread

Can you cite any reasons why this generation would flip upside down after six years when trends have been firmly established in previous generations about two years in? I think Sony is dreaming if they think historical patterns are going to magically break themselves just for Sony's benefit.

I think one of the worst things you can do, is to use a question as some kind of proof. Things are always changing. Hell, we have a black president, and even after a "historical pattern" of gay marriage becoming legal, there are now fewer supporting states than there were 4 months ago.

Edit: Summary: There are other ways to refute kjj's statement. You can bring up the sales trends of recent activity, the Wii nearing 50% and other things. But using a fallible argument, such as the one you used, "How could things change after looking at the past?", is only showing near sightedness. Things COULD change, but they will most likely not.

One thing that kjj does bring up, which is important, is that the decision makers at Sony have access to 150% of the information. And we have access to about 10% of the information. Sony does know what they are doing and they are doing everything they can, and if they can, they will upend the competition. As to how probable that is, they know a lot better than we do.