I thought Sony's best move was releasing a higher priced PS3 right before the Christmas season. Marketing genius.

Cutting their wage bill eh....but why?

Maintenance of home is going to be HUGE...24-7 staff for worldwide support, server support, regular back-up of data, patches...see WoW to gauge cost for operating such a large online space...or better yet, the sims online.

The analysts are saying that 16,000 job cuts won't be enough for Sony and that Sony needs to make a profitable area.  Since games won't be consistently profitable anytime soon, that leaves Sony in a very tough position.

No, I'm not.  You are inferring something from my post that was nowhere in the post.

First, if consoles stop selling developers stop making games for them.  Period.  That's what happens.  If devs stop making games, people shift to other consoles and your game sales will fall.

Secondly, the companies who expected the PS3 to get, say, 40 million by the end of the generation who are half way through a game development cycle now would be totally screwed.  Do you disagree with me?

Thirdly, the size of an install base is not the sole determining factor of what kinds of games a platform can support.  There are other considerations such as the cost of development, the current attach ratios, etc. 

If Sony canceled the PS3 it would be absolutely devistating for the future profitability of the entertainment division.  The Playstation brand kept Sony profitable for years and it was their great victory of the 90's.  Now it is their great defeat.

WoW is a bigger undertaking than PSN by far and it has cost less than 200 million to run since launch.  That's less than 50 million per year.  PSN probably costs less than half that.  The equivalent of putting a $25 price drop on hardware a year earlier than planned.

 Was about to ask the same question, particularly when Blizzard's slightly-leaked financial information suggests otherwise. Going by Blizzard's own finances, it was closer to 200 million per year, not 200 million total. 200 Million dollars per year is a sizable chunk of change.

No, he got it right....it's has been reported at around $200 million in maintanance cost, but it probably doesn't include one-tiem charges, like developing hte game and expansion pack.  Still, last time I checked, $200 million over 4 years is a HUGE sum of money, especially when you're barely profitable, and your profits were slashed by 70% last qtr.  is it going to be much much cheaper to operate PSN Home, and all the bells and whisltes, I can't say, but when you're cutting cost...

First I would like to take issue with the statement that the PS3 has lost Sony three billion dollars. This is simply wrong either your misinformed or misinterpreting the data. The PS3 has lost somewhere between five to six billion dollars. Sony has done an enviable job however of playing the shell game. From taking out seven hundred million dollar loans against the console to hiding it behind the profit margins found in the PS2 and the PSP. To even sliding one massive profitable studio from one division to another.

The console was a money pit, is a money pit, and will always be a money pit. This console has bled Sony good, and it will continue to bleed Sony. Even more damnable the BluRay player isn't exactly a dominant economic force. Sony won a war, but has lost so much in doing so it has to taste as bitter as defeat. More to the point the console cannot even sufficiently move Sony's own software. For every success there was a major defeat, and Sony is in the hole as a publisher.

I find it disconcerting how secure some posters feel about the prospects of the PS3 by proclaiming Sony must support this product so that they can have a forth. After all third parties will hold it against them if they discontinue this console. Hello where have you been for the past two years. They already hold Sony in low regard that is why they are blessing Microsoft so damn much. Sony went and did what these third party developers expressly asked them not to do, and all Sony did was give them a dirty look.

Beyond that why the hell would Sony be interested in going a second round next generation. This generation was a blood letting, and next generation they will have two powerful, and emboldened competitors that have cash repositories like Fort Knox. Which is totally ignoring the fact that this economic crisis is going to leave Sony very much crippled. They will not be the company they once were.

There is a saying in life if you can't beat them join them. Well whether you like it or not that is an entirely viable solution for Sony. Software is safer then hardware with its tight margins, and highly competitive nature. There is absolutely nothing wrong with playing it safe. In fact it would keep the number of rivals they have to deal with down. The BluRay player might have been a huge hit had Sony not been competing with Microsoft and Nintendo. Which ensured that the technology could not find its way into either console.

I am not saying the PS3 is going to be discontinued. What I am saying is that it is hardly impervious, invincible, or safe. This console is a drastic drain on Sony, and as time goes by it is less relevant for Sony to continue production. No it is not short sighted it is common sense. Why kill the innocent to protect the guilty. Killing off this particular product alone could make the division extremely healthy, and if they started porting their games to the other consoles they would start to see a lot of positive results. This division would be a glowing white spot were it not for the PS3 sucking up all the profit into its black void.

Don't tell me it is safe, because it sure as hell isn't, and do not tell me it would be a mad move, because you personally would not like it. That is the catch there isn't it a lot of posters just do not care what happens to Sony. They care about what happens to them. Well guess what life isn't fair sometimes your going to lose, and if you cannot afford to lose. Then you probably shouldn't play.

they made the ps1 and ps2, they are the best in when it comes to gaming! that is their strongest area!

A few comments have been very over dramatic I have to say. Sony and the PS3 wont be dead for alot longer than some think