Rather interestingly it is the most voted for option at this point (32% vs 30% for downsizing SCE).

The first two and the last are unlikely. PS3 has too much invested in it to scrap and the economic climate is too big to just ignore. No one can just run business as usual. I think it will be a combination of cuts to SCE and other divisions. The question is whether gamers will notice. Will announced projects be cut or just some more minor cuts in the background?

I have confidence in the indifference of (at least American) consumers to purchase entertainment no matter what. It will stretch out and worsen the recession but it will keep gaming pretty healthy.

IIRC there are rumours they're going to cut 5% workforce, not a good thing, but not terrible, given the crisis.

That was not a rumour, it was announced by Sony (they said it saves them around $1 billion a year). Many analysts are saying it's not enough though (and for good reason).

For the last two years the other Divisions had to pay for SCE. Like I posted before, it's the worst performing part of Sony for the last 2 years.

Past results will have gained SCE some credit, but lasts year's comments by Stringer made it perfectly clear that that credit was gone. Profitability was a must. It's unlikely SCE will be profitable this year, so shareholders will demand action. And obviously shareholders want action on the worst performing parts of the company.

How can charging for PSN be too drastic when you're discussing killing off the entire division (at least, this is how I interpret it).

It's certainly not too drastic, but I doubt they'll do that as it will remove one of the best advantages the PS3 has over the 360.

Frankly any of the easy solutions seem either not good enough or have bad consequences... I wouldn't like to be a Sony executive right now, not at all.

 Eh, I would... because no matter how bad the situation is at the moment, in three years time, you'll be sleeping on a bed of money again with many beautiful ladies.

At least, that's how I picture the life of an executive.

You know I've had two opinions on this matter:

PS3 side -> Business as usual, trade out of this problem because its one of time.

Xbox side -> Cuts to SCE

I think there will be cuts but because they are under-performing areas anyway I doubt anyone here will notice. If they say they are going to cut its for studios and areas which produce stuff you probably don't care about anyway, thats why they need to be cut.

Not even comparable. Sony carries $12 billion in debt. Nintendo is rich in surplus cash. Sony will have 165,000 employees to cut paychecks to. Nintendo has 3700 employees to pay. Nintendo could stop selling product today and could still probably operate for several years without making changes.