I wonder how Samsung feels right now. As far as I know, there is a hard competition between Sony and Samsung. But talking about cellphones and TVs Samsung seems to win. But I got no hard data. They are probably having the same problems like Sony.

The SCE will be affected by this, but it remains to be seen how bad this is. In the last 3 years, there was no groundbreaking successful 1st party-PS3 game. Uncharted, Resistance, LBP, GT5p (all bundled) etc sold well and did the best they could do, but the real big guns are still not released. Imagine a GT5 (Sonys biggest IP) would be available right now. Things would look different. Where is God of War? is it coming this year or 2010? Killzone2 had almost 4 years of development. You can't expect to be profitable without offering a great value to your customer. A customer won't pay for potential. I don't want to flame, but there was no point in buying a PS3 before mid 08. The long awaited games are coming in 09 and 2010. Don't know, but this could be too late.

Wii received the Mario Galaxy 14 months ago, Mario Kart, Super Smash Brothers etc are all avaible right now.

Xbox360 had Gears of War in its first year, Halo3 + Mass Effect in the second and Gears of War3 + Fable2 in the third.

Good thing they aren't competing with the Wii otherwise the forcast could have been even worse.

I think to have gotten to this position Sony must have made many huge mistakes at manager level.  It's a huge pity those who are going to suffer the most for those decisions are the staff lower down the chain who would be losing their jobs due to decisions they weren't a part of.

Headcount reductions do not always mean layoffs. Typically, if the company tap dances around the word layoff, what that means is they'll release some of their salaried employees and then rehire them as contractors, which is where a lot of that money in "restructuring costs" goes -- the employees have changed from 'heads' to 'costs.' In the US, at least, the cost savings to be had here is in the paying of retirement benefits, unemployment, and most importantly, health insurance. These are no small costs! You release the employee to sever your obligations, then hire them back through a headhunter. Now you've got the same employee back for less money, no benefits, and no accrued vacation time.

Not to say layoffs won't also happen, because they obviously do, but Sony has to evaluate the long term, since the flip side of any recession is the unprecedented exponential growth when you come out the other side, like a rubber band snapping back. Sony will want the most experienced 'heads' already under contract-to-hire when the economy turns and Sony is back in the black.

In terms of SCE, I think this could mean some studios will be "set free." I think for R&D, the big concern will be refocusing to invest in tech that will pay off in the short term through practical applications. e.g. Investing in OLED = Good. Investing in Aibo Robot Dogs = Bad.

Even worse for Sony is that MS posted a profit in their entertainment division, even after cutting the 360's price.

http://news.vgchartz.com/news.php?id=2853

OT:
It would have been such a great opportunity for MS to bury Sony and grab first place, they even started first this gen, but Nintendo stole it!

Steve Ballmer: "Waiter! Another chair, please"!

Having a competitor that dissapears is good for a company, never for the consumers.

Anyhow, the Microsoft business model pays-off.

As a DJ/Musician/Producer for 15 years, I will say they have terrible headphones, and I'm not sure why they bother.

this is really true, but depressing, even tho I have no PS3.

I had 3DO, DC, and Jaguar go under on me, also turboduo, all were awesome systems, that died too young.

PS3 is the latest (soon to be)

If I owned Sony and my people lost 3.8 billion of my company's money, Id turn the offices into FPS levels and kill them all.

Their $30 digital reference headphones are pretty solid. Always liked them. We use them in the studio. As solid a sound as my Behringer Truth monitors.