The available data from Sony says otherwise.

Sony's CFO declarations:

Source.

Here is their latest profit revision (when the currency situation was getting worse, but not yet as bad as it is today):

From my calculations, I'm expecting a $200 million + loss for the holiday quarter at SCE (although predicting the results of individual divisions is quite hard).

As always NJ5 already explained it, but MakingMusic you have a significant chance of losing your bet. Your explanation is correct, less PS3 hardware, more software, but th emain thing killing SCE's figures will be the strong Yen.

Beside this I think PS2 sales are below expectations.

"But I really cant see the PlayStation division going... it seems way too fantastic to be real."

You never know....personally, I´m not sure whether or not I´d like it...sometimes, 3 competitors seem too much, I miss the times when there were only 2 main competitors.

Weirder things have happened, though I don't want to see it repeated here.

@JGarret: I feel you. Man, buying all the systems was so much less of an investment when I could pretend the Saturn didn't exist, or when the SNES and the Genesis were the only ones that actually mattered.

 I would expect their home computer division to fold also, with the dominance of Dell, HP and Apple in the computer/laptop markets.

After the success of the PS2, I doubt that Sony would outright kill off its gaming division just because of misfortune with the PS3. They WOULD be smart to terminate some of their exclusivity contracts though. Its a luxury they can't afford right now.

-edited inaccurate info

the main reason i offered the bet was a belife that the PS2 has been far more responsible for offsetting costs then previously though. combine the reduction in unit sals, with the lowered value of the profit made on it with the slide of the dollar/euro, and there is pain... lots of pain for sony.

this also leads me to think that removal of the ps2 backwards compatability wasnt to save costs on the ps3 as much as it was to spur sales of ps2s just abit longer until the ps3 gained more footing, and had a profitable selling point, then ps2 BC would return

Where did you read about Sony discontinuing the walkman products?

Didn't Sony recently finish buying BMG Music? It would be quite weird to sell it right after buying it...

if you remember in the early 90s, kamart bought and sold boarders, walden books, office max, payless drurgs. each was oowned from 2 to 5 years....

I think they are very likely to sell at minimum stakes in sony BMG, but i see sony ericeson as the bigger sacrifical cow

How much can selling Sony Ericsson really helping them?

First of all, it's not based in Japan, while the article makes it seem like Japan operations would be the most affected. That also means it's not affected by the lousy exchange rates. Thirdly, it really isn't losing any great amount of money... $18 million in one quarter is nothing.

Granted, I have no idea how Sony Ericsson will do in this holiday quarter. I'm guessing cellphone sales aren't too hot these days, but then again what products are selling well these days?

The answer would be videogames and consoles...
Unfortunately for Sony not theirs.

Even if Sony quit making Walkmans, it would acount for absolutely nothing of their total business at all. And the article clearly talks about Divisions, not a small subsegment of their main division. Sony will likely never give up making electronics.

The more I think of it the more realistic the idea of the sale of a huge chunk of SCE becomes. I hope not, cause competition is healthy and it will hurt the industry big time if they lose a big player, but it's one of the few Divisions they can easily sell for quite some money. The Activisions, EA's and Ubisofts will wait in a line to buy God of War, GT and their developers.