Slowing sales of hardware may also slow sales of software as well which is where the money really is.  It causes this avalanche of doubt on the platfrom and will send a message to third parties that it might not be worth it to do the port of X game.  It will definetly guarantee no third party exclusives.  The entire platform will be fueled by first party games.  Sony makes great first party games but they've never had to rely on those games as much as Nintendo has on theirs.  Gran Turismo is the only franchise they have that sells as much as a Nintendo game.  Hopefully they can push Gran Turismo into next Christmas to give the system a boost before the end of the year.

Also, what kind of message will they be sending out to the consumers looking to purchase their system?  At least when Nintendo was falling way behind in sales the incentive to get a Gamecube was pretty huge.  99$ with 2 games of your choice.  399$ with 2 games preselected seems like a big risk on a platform that's gone into cruise control.

It's a shame that so much went wrong with the PS3 all at the same time to cause this mess.  I still don't understand why they didn't take the PS2 chips and improve on what they already had.  It would have been a lot cheaper to push out the door as they already have the fabs making PS2's.  Design costs would have been super cheap, plus the developers already understood the PS2 architecture.  It would have been easy to start off making a PS2 game and transition it to the new system design.  Too many cooks in the kitchen.  No one with the good sense to say what needed to be said.  (Yes an upgraded PS2 could have run HD content, for awhile you get a PS2 supercomputer from Sony to render your HD projects).

1)Nintendo was never being disrupted. Sony is. This is a crutial difference as Nintendo was able to bounce b ack. Sony can't. The reason Nintendo can disrupt is becuase they have a sword (their skill that let's them cut upstream) and a sheild (their unquie motivation that will deflect counter attacks). The reason Sony can not do the same is becuase.......

After the disruptor proves the New Market does exist and is viable, incumbents attempt to mimic the disruptor in order to gain access to the New Market. This co-option is a counterattack that will stop the disruptor (for the disruptor loses the new market base to move to upper tiers). Unless the disruptor has no shield (asymmetries of motivation), or if the motivations of the disruptor and incumbent are the same, co-option will successfully prevail. An example of co-option would be incumbent telephone companies responding to wireless technology to sell it to new users. The incumbent missed much of the new growth but is eventually able to tap into the New Market. Since wireless had the same motivation as the incumbents, the disruptors had no shield and were absorbed.

In order to withstand counter attack, sufficient asymmetries of motivation must be developed for the disruptor (what Christensen refers to as the ‘shield’). For example, Microsoft can imitate the Wii with a Wii remote knockoff but the motivation for creating it is very different from Nintendo’s. Microsoft will not have the passion to go after non-users and low demanding consumers in the way Nintendo did. If the reader happens to be a professional analyst and needs translation, this means what matters now is no longer the size of the dog in the fight but the size of the fight in the dog.

Since Nintendo has a sheild, they will be protected from Sony's counter attack. Nintendo has a unique motivation which will make counter attacks useless. This is part of the reason disruption works.

3)I doubt Sony can reinvent. Remember, all of what you mentioned means more dollars spend which means bigger hole. In order to release a new console, they would have had to alread start. Additionally, they can not fight Nintendo. They can fight Microsoft, but not Nintendo. Of course, they have been losing the war with Microsoft too. If the new CEO understands disruption, expect SCE to be gone.

4)The problem with the PSEye is it does not target "crummy" consumers. It targets high end users. Yes, they can go from top to bottom, but since Nintendo is there it will ultimatly fail. There is also a problem as Sony London will not make the game for "crummy" comsunmers. It will be designed on the idea on it's new technology rather then technology in application. The PS3 is also expensive and targets only unparket consumers. It also has a small library. It will not target anyone.

5)Oh ho ho. I guess you don't know about New Generation advertisments. Did you ever notice the "Wii would like to play" advertisments? The idea was that the focus is people playing the games, not fotage of the games. All ogf the PS3 commercials are showing off the games. It is not down market advertisment. It still over shoots the market.

I know you want to say Sony can crack the new market or even turn a profit but neither will happen. The hole is too great, the race is almost over, and Nintendo will be knocking any second now. This is really a no hope situation. I've said it a lot but if the CEO knows anything about disruption thenhe will kill off Play Station. If he does not, the system will keep on trucking before being a goner.

@Smashchu: Not that the Malstrom quotes wouldn't describe the situation, but in order to understand Christensen and the situation itself/the market, you need to do the same thing Malstrom did; think the things out by yourself.

Since the console industry is cyclic, where you introduce a new console every couple of years, there's always the chance to strike back in the next gen (although, with the brandname Nintendo keeps itself big in the next gen too). Also, being disrupted doesn't mean the incumbents (companies) would be destroyed, despite that happening too, the incumbents can still make big profits by following the disruptor (of course, when they have planned their business so that they can make profit without being market leaders).
At the moment Sony is in bad situation due to their expensive console and the companys other ventures getting hit too, but next gen they may have a cheaper console that they can profit from.

without playstation many people wouldnt be gamers, i couldnt imagine Sony not being in the gaming market.

Without Nintendo many people wouldn't be gamers, but that didn't stop Nintendo from falling much further than the Playstation Brand ever has. If the Playstation must fall, then so be it.

Come to think of it, without Microsoft many people wouldn't be gamers, but its fair to say the vast majority of those gamers are most likely what is fueling the declining trend of HD Western Shooters that is suffocating all other genres on the market now.

*~Onna76~* said: Ronster316 said: awwwwww , poor sony............ muwahahahahahahahaha   And this ain't trolling? I'll beat the crap out of you in person if I had the chance. Now I know for sure that this website is pathetic biased and it ain't towards Sony *pulk*.

Calm down girl.

Sony is doing poorly. The Ps3 is doing poorly. The PSP is doing poorly. There is much negativity to speak of in regards to Sony and if you don't like it, then I think a news site where we discuss such things is not going to be for you. Yes this person was out of line and borderline trolling, but with how much Sony has screwed over gamers this generation with the PS3 you can rest assure that many share in his sentiment.

This has been a continuing problem with you in your freaking out at a moments notice over anti-Sony sentiment and admonishment of this site as being anything other than a safe house for Sony fantatics. Not all of us are going to fall all over ourselves the same way you have for the PS3 and the perception that it is your answer to Japanese gaming this generation.

This generation is the breaking point of a build up of worrisome trends in the industry that have been growing for a long time. Developers are taking less and less risks and becoming more and more followers of self destructive and narrowsighted trends. Multiplatform standardization has virtually eliminated any incentive to compete. Both MS and Sony are for the most part extinguishing any brand of gaming that isn't Western targeted shooters whether they intend it or not. The Wii is struggling to persevere and be the one guy doing the right thing inspite of a near industry boycott against them. This is not going to be a generation where there is a clear cut best choice or a conventional winner for your typical gamer.

 Actually Sony is falling much farther than Nintendo, Nintendo was always profitable, and took two gens to fall to third place, Sony is already in third place, and is needing to layoff people to survive

In that regard, yes. Sony is doing much worse, but still, from the point of market share none of the current standing parties have done as poorly or sunken as low as Nintendo did with the Gamecube. The point though is Nintendo was able to survive this drop regardless the circumstances. If Sony can't survive then so be it.

No, your right. I want to get the books actually. I might see if my library has "The Blue Ocean Strategy" tomorrow. (Actually, I think that makes me a hypocrit).

The problem with Sony is that can't copy Nintendo. They lack the passion to make games and the want to change their business model. If Sony were a game compna first, they might try. But since they aren't (and Nintendo has a sheild) I don't think Sony's game division will last.

 Difference is the market leader back then started a year ahead, not a year behind like the Wii did, PS3 will probably end up in a similar situation as the GCN, it'll just take longer since unlike the PS2, which had no competition, (well except for the short lived dreamcast), and was able to build up a marketshare lead, the Wii started from zero marketshare, with the 360 having a year with no competition.  Wii is already nearing 50%, after less than 26 months, at this rate it will reach PS2 levels of marketshare.