I'm not going to get too paranoid.
Unless it comes from a Sony TM, i'm not even giving it a second glance.

@Smashchu2

1. Nintendo is not invulnerable and the last decade should be a great example. Sony also has the PSeye which with few upgrades could produce even better motion controls than Wii remote.

Example:http://www.youtube.com/watch?v=iNg9Q23aQcY


2.Why control the living room if you aren't going to make money doing it? Besides everyone knows that all businesses aim to make money.

3. Less PS3's sold = less losses. Since they are selling more software that actually sounds like a good thing. So if they Sold 0 PS3's in 09 that would mean no losses and tons of software profit.

4. The beautiful thing about Sony's glorious mess is that most of the money spent on R&D will be spread out among the next gen for them too. They can probably release a console for $249 or $299 that is profitable that uses all the pieces of the ps3 and a few new bells and whistles and still be marginally more powerful than the ps3 To help retain the HD crowd as well as Blue Ocean gamers

5. The SingStar and Buzz games do appeal to downmarket consumers. I'm sure they will have even more with their new focus in Software(EyePet and whatever else Sony London dreams up).

Nintendo isn't invulnearble, but they are profitable, and have a large war chest, they can ride out a major storm, Sony can't , even in the worst days of the GCN, Nintendo was never in the same danger that Sony is in today

Ah, that comment, yeah, that is the reason you should read these. It's not that I can't see the big picture. I can. The big picture is a lot more grim then you would like.

Sony is being disrupted and typically there isn't much they can do. They can try and stop Nintendo at the lower tiers, but since they showed nothing at E3 08, my guess is they either are in survival mode or don't know what is going on. The reason for the "ZOMG all is lost, sell everything and lets go hide in the poor house" is becuase they have no options left. They can't copy Nintendo becuase they don't have the values. They can't stop Nintendo at the lower tiers becuase their core market won't let them. They don't have many options left and their gaming division is already a money hole. It will only get bigger.

Disruptive technologies, however, are very different from sustaining technologies as they change the value proposition in the market. When a disruptive product appears, it almost always offers lower performance in terms of the attributes that mainstream customers care about. (For you hardcore gamers, this means ‘crummy products for non-consumers’). While the Wii may be inferior in graphics and horsepower, it contains attributes that fringe customers value such as cheaper, smaller, simpler, and frequently more convenient to use. Due to the experience and investment, the developers of disruptive products will always take over the older markets. This is because they are able to deliver sufficient performance on the old attributers, and they add some new ones.

So go read about disruption and the Blue Ocean Strategy.

@ No, you are right. Products can be top-down disruptors, but they can still fail to bottom-up disruption

Heed this lesson well, analysts, when you all slavishly predict Playstation 3 to undergo a top-to-down disruption. Historically, top-to-down disruptions lose to the typical down-to-top disruptor. Don’t forget what happened to Wang’s word processor or Satellite Radio.

All quotes came from here

http://malstrom.50webs.com/disruptivestorm.htm

1. For one, no one is invulnerable to disruption. But remember that disruption is all about inferior products. The PSEye is better then a Wii Remote (and defiantly cool), but it is too expensive. The PS3 can never be disruptive as it is too expensive (I don't see top-down disruption anytime soon). It will not attract the expanded audience as it also lacks many necessary values. I could stop Nintendo at the lower tiers, but I doubt it will due to it's lack of software that will attract the expanded audience. It would work if Sony built the PS3 around it.

2. In this case, they are not interested in the short term loss but the long term if Sony was successful. If Sony pulls out, then Microsoft may fallow. 
3. Less PS3s sold also means lower software sales as well as a loss of support from 3rd parties. Their goal is to get them out there and then make all the money back on the huge library, accessories and royalties. It isn't going to work now because it requires short term losses (these aren't) and lots of support (what they aren't getting). Microsoft is one of the big reasons they can't make money. They are spiting Sony's market.
4. I don't think they can release a system like the Wii (neither can Microsoft). They have moved so far upstream that moving down at all will have their core market and investors lose faith. They will then have to move back upstream. Additionally, they do not have the values nor do they have the integration to pull of a Blue Ocean product. 
5. Put those games on a Wii and watch them soar. Put those games on a PS3 and they will fall flat (they could still break a million though).  The PS3 does not have the library the expanded audience wants. Nintendo does. Sony's PS3 is also too expensive. It does not have what consumers want. Also, even if Sony had a grand library of "expanded audience games," no one would ever know thanks to their current advertising which focuses on the upmarket (as does the entire system).

About point 4, Microsoft can and will. I'm not sure about Sony, but Microsoft is well aware of the situation. Mark my words they will play Nintendos game next gen if they play at all, which they will.

Smashchu2: "Put those games on a Wii and watch them soar."

You're joking, right?

Call of Duty: World at War

http://vgchartz.com/games/index.php?name=World+at+War&console=&region=All&developer=&publisher=&genre=&keyword=&boxart=Both&results=50&order=Hits

Madden NFL '09

http://vgchartz.com/games/index.php?name=Madden+NFL+09&console=&region=All&developer=&publisher=&genre=&keyword=&boxart=Both&results=50&order=Hits

Can you even name any cross-platform games on the Wii where the total, let alone the attach-rate, can even compare? Maybe Star Wars: TFU, for the total, but the attach rate... not even close?  Maybe a nice casual sports title, like Tiger Woods '09?  ...and... that's about it.  In very few cases is the much-more-expensive Wii port (as opposed to a PS360 port from one system to the other) even likely to be as remotely close to being as profitable as the PS360 versions?

The demographic scatter of the Wii is the reason 3rd parties won't put good titles on it, no matter how much fanboys whine.  It will need a downright colossal advantage, in terms of marketshare, in order to attract major 3rd party attention outside of some niche genres in Japan (like RPGs).

I can't see them axing SCE.... perhaps a few jobs from it, but not the full Company....

Tsk tsk. Start reading.

Both games are ones that have always had developed in Blue Ocean ideads. Singstar did well on the PS2 becuase it attracted many different users, including down market users. The PS3 is a very upmarket console that just can't support these types of titles.

But the Wii can. You may say "Nuh uh, Wii third party sucks." Wii third party sucks because developers suck. They focus on demographics instead of selling to everyone. They also focus too little on the Wii. LBoom Blox is the best example of this as it was sold to a demographic rather then to everyone.