Yeah I'm pretty sure they're gaming division is firggin stellar :P They've already forcasted breakeven on hardware, and that's considering that they're division is the name holder for blu-ray, cell, Home, and the Playstation store. So I highly doubt they're gaming division is going to see much abuse.

Throw away the previous forecasts. They aren't worth the electronic paper they are written on. The economic conditions are far different now from when those estimates were made.

 While I don't think Sony has any real chance of going bankrupt, I'm confused by that statement too of aspiring to of becoming multi-billion dollar leaders in several areas while not surviving in its current form.  Thye won't do it but it would be nice of them to define in what capacity they would "survive" and what if any divisions would be scaled back or eliminated.

I know some get riled up here about these "annoucements" posted for what some might see considered for ulterior motives  but the economy is in much dire condition than what any company could have predicted and Sony out of the big three is much more vulnerable.  Their relative debt and cash is relatively good but like others have said that cash will soon be used up and they'd rather used that cash to refinance their debt internally rather than going to the banks and paying exorbitant terms. 

i don't know how they can do it...but what japan really needs to do is fix the exchange rate issue. japan as a whole (not just sony) is an export driven economy and the strong yen is hurting them bad.

@Fishy, I highly doubt the forcast on break even point for the PS3 would have changed that significantly :P They've been minimizing the materials for quite some time.

"If you're a first-party developer reading our news articles, living in Europe, you'll be happy to know that your job is secure. Speaking to a Dutch economics program, David Reeves discussed the recession and how it may or may not affect the video game industry. While some may claim that this industry is impervious to recession, Reeves disagrees with the majority. Reeves cites that most consumers have chosen to overlook the recession in favor of their favorite holiday season.

Something that we loved hearing from Reeves is his outlook on the in-house development teams. Instead of looking at these employees as a cost, he considers the teams an investment. This undoubtedly saves many projects from being canned and gives PlayStation owners more to look forward to.

"We don't have many personnel to cut back. Half of our personnel are in the development of games. That's an investment. We're not scaling down at all."

It's always good to know that the games come before the cost. This is probably a key contributor to why Sony has some of the best rated titles on a yearly basis."

Posted on December 16th

You have to remember that the strong yen has offset a lot of those gains made, so Sony may be further away from breaking even then they were previously.

Actually, it has changed significantly. The 105 to 100 drop in yen/dollar made them do a $300 million revision downwards just in the game unit. Now the yen/dollar is at 87, almost 2.5 times as big as their previous adjustment. On this factor alone it could cost them another $700-800 million on currency alone. That's not even including the shortfall in PS2 and PSP software sales.

Sony still has an investment grade credit rating.  They're not going bankrupt anytime soon and they have all kinds of room to downsize.  But companies that downsize in tough economic times usually come out of those times weaker than they originally were.

And, as I said, Sony may have to make some pretty big moves if the economy continues to be this tough for more than a year.

However, the PS3 just keeps losing money for Sony.