Guys... Sony Computer Entertainment is one of the most profitable divisions of Sony, after you discount hardware costs. The article itself mentions that focusing more on "software" as one of the goals they are shooting for.

At Sony, "software" means games and PC products (like their music studio stuff). Only 8000 of Sony's over 150000 employees work in the SCE division. If they do anything, they will axe hardware/financial/manufacturing divisions and enlarge their software division. PS3 owners have nothing to worry about. Contrary to the "OMG everyone panic" idea presented in this thread by many posters, this could be one of the best things to ever happen to the PS3.

^Groucho

Your the Man!

You know I'd love this to be true, however they won't discount hardware costs out of the equation. They will look at a balanced situation : Hardware profit (loss) + software profit (loss) = profit/loss and we all know that including hardware will mean a loss is the end result. They also look forwards, i.e. can we quickly turn this around,  and they also look at their competitors, i.e. can we compete against them, do they have more resources than us etc and on both counts the PS3 looks iffy.

The PS3 could be safe if they look long term (3 - 5yrs ahead), but we all (sadly) know that the markets force companies to look short term (next profit statement, next divident payment etc).

For software they could mean they'll do a Sega - drop the hardware and use their software houses to develop their games for all platforms.

If any X-Box fanboys get all happy about the potential for PS3 being discontinued they should realise that they have gained from MS having Sony as a competitor - they'd have been no 3 year warrenty for RROD if Sony were not around for example and X-Box live wouldn't be as good as it is now without Sony snapping at their heals with PSN. Also, if PS3 went the way of the Dodo the 360 would suffer a very large drop in support as HD console games wouldn't be as big a market as before.

While shutting down SCE seems like a possibilty, here is why I think that the Playstation 3 has nothing to fear:

- The only loss made in the Playstation brand is on the PS3 hardware it self, which is steadily falling in price.
- The PSP and PS2 are still bringing in profits, helping to offset some of the losses made on the PS3.
- Home has just been released, which seems to be quite a cashcow.
- The Video Store is coming to EU and JP, making the PS3 even more appealing, even when you don't speak of the profits this can bring.
- The Gran Turismo series are a major cash cow, and the more potential customers for this game the better.
- 1st and 2nd party games making nice profits (as Sony gain more money from these than the 3rd party software sales).
- 3rd part games selling at a profit for Sony
- Is good for blu-ray, as every PS3 owner is a potential blu-ray buyer as well.

This is, in my eyes, enough to justify the continued sales of the PS3, and while SCE may feel the pain, I doubt the PS3 will be heavily affected beyond maybe the sales of studios or IPs. Sony has some decent IPs that haven't been touched for enough time to justify a sell if you ask me.

" Also, if PS3 went the way of the do-do the 360 would suffer a very large drop in support as HD console games wouldn't be as big a market as before."

I highly doubt the PS brand is going away, and competition is great for gamers. However if some strange way it did go away, the 360 would pick up a hell of a lot more people who want HD gaming.

 Not really sure losing over $3BILLION in 2 years could be considered "profitable". The money they are losing each year is declining due to finding and making parts cheaper for the console but it is still losing money. In 07 Sony lost $2.6Billion due to the PS3 and in 08 lost $1.16Billion by June 08. That was just 6 months. With the last 6 months of 08 due to be announced soon i think we can bet that it is increased not decreased its loses from June. Meaning it is very possible that in 2008 the PS3 lost $2Billion. Again that is very far from being profitable. Closer to being bankrupt then making money.

So you're saying SCE will ditch hardware and focus on making software? Isn't that similar to predicting Sony will be like Sega?

Note that I'm not saying it will happen, just trying to understand how this can be the best thing ever for the PS3 as you said.

Not necessarilly. A minority, but still significant % of PS3 owners (the fanboys) would rather eat excrement than buy a MS console. Also, having spent $400 on a console would they want to go out and spend another $200 (or whatever) on another one?

Also, with Dreamcast, didn't a large body run off and by an X-Box than by the PS2?

If Sony did decide to withdraw from the market, then some would not buy a console this gen or another one at all, some would buy a Wii, some would go for PC and some would go for 360. So, the HD console market would be diminished overall.

I am not calling you a fanboy, but you are definately looking at this through fanboy eyes.  Anyone wanting to pickup an HD platform would have to go through M$.  It would give it a much larger market share and in the long run much higher profits.  M$ wouldn't have to bundle as many games, or cut prices as quickly.  So of course M$ would want Sony to go belly up.  It would be like Burger King being happy that Mcdonalds went bankrupt.  Would you think that Burger King would sell less hamburgers?  If someone is hungry they will eat where they can and the same can be said for gamers. 

I seriously doubt we will hear the PS3 is dead anytime soon so this doesn't matter anyway.

sony's fine. anyway we will see.