Dude it was from last week or the week before

Not to mention that Son'y other divisions are unprofitable.. the PS3 is in a hole it really can't come out of. Nothing will save it.

This is a terrible idea. Even the Wii is more powerful than the PS2.

Many developers, including Sony's own first party, are developing for a technological powerhouse (ie the PS3). How do you think they would feel if Sony suddenly said "Sorry, we're canning the PS3. Scale down your projects and work on a game for this last gen 8 year old console". I'd say a lot of the first parties would be pissed, and a lot of third parties would just quit and make the game 360/PC.

I would certainly be very annoyed if they did this, and so would the other 18.5 million people with PS3s. We would all begin to hate Sony for doing this. The PS4 would do even worse than the PS3.

Not to mention the amount of money Sony has spent on first party games. What was it, over $20 million for Killzone 2? You think they'll just cancel that?

Sony's best chance of surviving in this market is to take out everything that is unnecessary, and cut the price as much as possible so that they just about make profit on the PS3. Sony needs to moneyhat exclusivity, Sony needs to moneyhat multiplats. Sony needs to advertise, properly. If they do all of this, the PS3 can easily end up in second place. Any chance of first place is long gone.

So what if it's less powerful, and so what about the third parties? They only want the technological powerhouses so they can put marketing shinies into their games: they've developed far better games under far smaller budgets on far "lesser" hardware. Only Wii fans even bother to argue that their current library beats the PS2's; the HD fanboys recognize the superiority of the PS2's library to their own far more readily, even as they irrationally cling to the misconception that more powerful hardware is somehow making their games better.

And if you're annoyed about having wasted your money on the PS3, then this only means you're late in coming to that realization. You should have been annoyed about it long ago, because this could have been predicted from the very beginning, and many people did. No one can buy a console without drinking at least a little marketing Kool-Aid, but Sony's folks had to work overtime, and the scary part is just how many people they were able to dupe into buying something that everyone else realized never stood a chance. This wasn't just a matter of hardware or library superiority: the PS3 isn't even viable, and truth be told, it never was.

The things you mention are not Sony's best chance of surviving, for one simple reason: Sony cannot afford to do any of it. The most they can cut the price to "just about make profit on the PS3" is less than zero; if they want to make any profit they'll have to raise the price. They don't have the funds to moneyhat exclusivity or multiplats. Proper advertising at this point involves hiring a new marketing agency which will no doubt want more money given what Sony would be hiring them to do. That's just the problem: everything you say could in fact turn the PS3's fortunes around if Sony could do it, but they cannot. Therefore, lesser and riskier strategies are required, because Sony can't afford the safe stuff.

But whatever. I still believe I present the most realistic plan for Sony's survival, because it represents a balance of what can work and what Sony is actually capable of doing, but none of it matters, because Sony won't do it. It's a Japanese company; it comes from a culture where not so long ago people would kill themselves rather than lose that much face, and still do on occasion. Let the PS3 be Sony's seppuku, because at the rate it's going, it will be.

The PS3 was/is a commitment. Researching a new console at this juncture is folly (money is far better spent making the current one cheaper and cheaper), and Sony will be making money from software AND hardware this coming year (2009).

They're not going to close up shop until the PS3 and 360, combined, hold less than 35% marketshare -- because, at that point, all 3rd party publishers would abandon the HD consoles altogether and make Wii games. 20 million consoles was close to how many the GameCube had at the end of its life, last gen. The PS3 is not the PS2, but Sony is far from going the "Sega route".

Indeed, the PS3 is a commitment like the PS2 was (the PS2 also lost money in its first year likely due to selling hardware at a loss). The difference is that the PS3 has already proven it won't make back the money it lost to the gaming division. This because it has lost more money than SCE made during the PS2 era. The PS3 isn't poised in any way to repeat PS2's success, therefore it won't make back the lost money (upwards of $4 billion and counting, perhaps more than $5 billion depending on how much PS2/PSP have been contributing).

If Sony was a smaller company, the PS3 could well have tanked it completely. Fortunately for Sony, the financial crisis didn't hit one or two years earlier, otherwise the remaining Sony divisions would have a much harder time covering up the PS3 hole.

Well Sony Can cut $25 in march then cut another $100 at the end of the year to match M$ cuts.

Researching a new console at this juncture is far from folly: they're doing it right now. So is Nintendo, and so is Microsoft. That's just how the industry works: when you finish one console, you start work on the next. Sony, in its arrogance, might have shown up a little late to this party (witness the "ten-year plan" BS) but rest assured, they're doing it now.

But you're right that researching a completely new console as a quick replacement at this juncture would be unwise. This is why I suggest looking to the PS2, a position where Sony is still strong. Obviously this does not cut out all production costs, but it does drastically reduce them. Having research costs at all is suboptimal, but I don't see a way they could be avoided, so best to minimize.

Also, while I think that 66% marketshare for the Wii (if it ever comes to pass) should be a signal for developers to switch, the marketers will push back: they want their easy-to-sell Shinies (tm), and the Wii can't give them those, and they know it. They hold a lot of power over the developers: enough that I believe we won't ever see the Wii taken fully seriously by the third parties in this gen. A successor to the Wii might, even if it holds a similar place power-wise, but the Wii itself will not.

Point is they can take it, they are a big company with lots of cash. Lowering the price is a definte option in 2009.

They don't really have lots of cash. Not for a company of their size at least. They have $7 billion when a recession is starting. A price cut costs at least $1 billion a year, or 14% of their cash reserves.