You judge which company is "smarter" based on the economic philosophy they use?  Look, last time I checked Nintendo was dominated for ten, count 'em TEN years while this is Sony's first taste of getting pwned.  Why couldn't such a smart company (Nintendo apparently) recover faster than that? Different business policies does not equal greater "intelligence". 

On the PSP, anyone who thought the PSP would just waltz in and steal a monopoly that Nintendo has owned for years overnight is ludicrous.  If Sony ever said that, well, their PR is famous for a reason.  Their PS2 BS didn't do half bad for them last time I checked.  I'm not counting the next PSP out whenever it comes out.  The first handheld to ever put a dent in Ninty.  About 1/3 of the market actually.

They should definitely not drop the Playstation brand.  That would be a knee jerk reaction at its finest.  Ninty didn't need a fresh start with the DS, their 100% monopoly was not in any danger at the time.

Sony definitely needs to rethink things, like their price.  Let's see if Sony gets beat like they stole something for ten years before we go crazy.

FYI my posts were sarcastic, i fear some may have misunderstood

Lol!
(I love this site)

nuclears please.

ummmm....

Sell ALL Of the useless SCEJ studios

Sell USELESS developers like some of the london ones

THis should generate profit....

Keep Ps3 sales as they are going....it should sell 10 Million in 08 anyway....radically reduce cost of compnents....to be able to atleast make a $50 profit on the PS3.

profit of selling IP's & Studios + $50 in each PS3....should make enough profit to be able to keep the brand in business financially.
_________

If the situation was very DIRE.....I would Sell Gran Turismo as an IP & polyphony digital with it to the highest bidder.

I think NYANKS has a good point. We must remember that the Playstation 2 and PSP are being sold for pretty good profits. Although the Playstation 3 is an economic failure for Sony by wide margins, Sony can't cut off, or impede it's gaming division because the sum of it's components are pretty good.

I like the idea of this thread cause you KNOW you got alot of "arm chair" CEO up in here! =D

...First thing I would do, and I'd hate to do it, but I'd ditch the "10 year plan" for the PS3.

I would look into creating a more affordable, YET competitive PS3Lite, or PS4.

...I would understand that quality games for everyone is whats important/sales and probably would adopt a more broader software model.

...I wouldn't rely on my 3rd party partners to create the broad range of games for me.

Admittedly my approach would be patterned after Nintendo, so I would be looking at performance/profit with my hardware approach.

...Bottom line I would go back to the formula that made the PS1 THE PS1, when they BEST Nintendo and what they did best, catering to everyone.

**Commentary** It boggles my mind that a company would do a complete 180 from the approach to gaming that they had just 5 YEARS ago. I want from a PS2 to a Wii cause I saw it basically continuing what PS1 and PS2 did...Something for everyone.

@mrstickball

my point was the best :(

No pricecut to all three consoles and focus on making profit enough to fund next-gen developing.
At this point there would be no focus in competing with MS or Big-N. If PS3 outsells X360, good and well. If does not, still making profit and no financial loss.
Then PS4 would be released before its competition and (try to) stabilish itself as the next-gen console of mainstream choice.

Oh, also, for how I'd save the Playstation 3 from utter doom:

- Don't drop the price unless it's profitable. The Playstation 3 MUST make money on every console sold. Rather than making big $50-100 drops every year, drop it by $25 when it's convent.

- Scrap the unprofitable, and stupid blockbusters. Although the Playstation 3 was built with power in mind, Sony is losing a lot of cash for it (they aren't selling well). Rather, focus on building a stronger 1st party base of smaller, more Nintendo-like titles. Even MS is doing a better job with Lips and Scene It (LBP would be the precursor for this line of development).

- Work on building a stronger BC library of online titles, similar to what Microsoft is doing with Xbox Originals. Every Sony-published or 1st party game from the PS1 and PS2 era need to be available online - This would give Sony a great revenue stream....And could also port the titles to the PSP as well.

- Continue to support the Playstation 3 with titles as long as possible - Make it 'forward compatible' with online offerings of the PS4 titles.

The overall goal would be to ensure profitability. It may get hammered in the console race, but at least it would give the Playstation brand name a solid platform for profits.