There's a lot more to it than just the PS3's low sales (though they are certainly a factor).

Moe of it has to do with several important economic factors - if the margins on the PS3 were so low that they were only barely breaking even, then the ~20% drop in strength of the USD and EUR against the yen puts them scarily in the red. That's true for the PS3, but it also cuts into the profit margins of the PS2 and the PSP. Meaning that in order to keep profits at a reasonable level, the PSP and the PS2 have to sell much more units than before - assuming that they're even making a profit at this point. But they aren't.

Low PS3 sales aren't positive. They're never positive, especially when the console is costing them money. The PS3s that are already out there (and not selling) are a sunk cost that Sony definitely wants to at least partially make back. If they don't sell, then the PS3s are just sitting in a warehouse somewhere, costing them more and more money over time.

The whole thing is only exacerbated by the fact that Sony is hurting in nealy every other division, too. That's why they fired sixteen thousand people. That's why economists - not just random dumb-ass fanboys on the internet - are panicking. We're heading into rougher economic times, and Sony is already in bad shape at this stage. Before it's over, the economic could end up affecting even Nintendo, much less a company that's already hemorrhaging money.

Lower PS3/PS2/PSP sales are difficult in another respect - they indicate a level of consumer disinterest. This is awful, especially for the PS3 (whereas with the PS2 and to a degree the PSP it's to be expected) which should be making gains this holiday season. It indicates they're losing lage amounts of consumer mindshare, which means that this may actually be indicative of a larger trend away from SCE products.

Does this mean Sony's going to crash, or pull out of the games industry, or even discontinue the PS3? No. Of course not. Calling that this early would be ridiculous. But if trends continue in the direction they are currently going, then Sony is going to be in a much worse place in six months than they are now, and considering the downsizing they are already doing that is really saying something.

And yes, I agree that moderators should try to be more objective in general.

Too much sony hate in this article.

According to Sony, losses are slimming. Loss per system sold is alot less now than it was at first. Granted, Sony's still losing money with every system sold, but that's because the systems cost alot more than an Xbox360 or Wii to make and Sony is trying to sell it for a price fair to consumers. I think Sony will find a way to cut the losses and make profit, but honestly I don't think it will be quite quick enough to make PS3 as relevant as Sony wishes in this generation.

Whilst I agree with the 3 arguments the author noted, I think it's pretty ridiculous that they used November specifically. I'm pretty sure it's the only period (aside from maybe October) where the PS3 has been down and kicked around (but I haven't checked).

If they'd used the whole year uptil this point, even if the picture were still the same, at least it'd be more credible.

Imagine the uproar if they had use vgchartz figures as opposed to NPD...

EDIT: Forgot to add, that noticeable difference thing is bullcrap, anything above 40" and there are noticeable differences (I'm running on a 46)

SONYY IS DOOMED, that's it, who want a 60 gb playstation 3 with two controllers and 6 games for 250$ or best offer

I'll buy it.

I'll top NJ5's offer by fifty bucks if you change your signature.

Oh please remove that image.

Seems to be a lot of denial of the business reality here, with a few notable exceptions. Sony is in a terrible position now, their short term future is very bleak indeed. The whole company is at serious risk, and they will need to make some drastic changes to remain a relevant player. Being a big company does not make one immune to reality. MS has huge cash reserves and can sail through a short term recession with no trouble, and the same goes for Nintendo. Not so for Sony. They have already had to sell assets, and they will have to do so again, which will leave them weaker.

The situation is not entirely different from Apple vs. PC-makers: Apple has huge cash reserves thanks to their higher margins, while the PC manufacturers have for years operated on razor thin margins and huge volume. Apple plans to be aggressive during the recession and invest more on R&D, giving them an advantage coming out of the recession. I wouldn't be surprised if that's what Nintendo and MS are planning on doing as well.

You may not like it, but your liking has nothing to do with it: Sony is in trouble. And when facing such serious problems, past glory means nothing. All the PS2 sold don't mean a thing now when the PS3 is considered. Of course, we do not know the internal cost structures of all the different products Sony makes, and that being the case we can't say what products will face the axe and which will not, but the truth is that PS3 is not looking too hot as a business.

You can block it off if you have firefox (just install the adblock extension, and then right click the image, there's an option to block it).

You sir are a gentleman and a scholar. I already have sigs turned off, but when I went to reply to him it jumped out at me.

I'm still willing to outbid you, though.