Sony doesn't decide what will be the next "huge franchise". Customers decide this. Sony has given the world, this time around, LittleBigPlanet and also Uncharted. There is also EchoChrome. They brought back Warhawk, and also have MAG on the way.

And people, STOP trying to make your pet game you like THE next franchise. The Killzone 2 hype was near nauseating level.

I say, Get on Level-5's ass on making the Dark Cloud Series the next FF. Each game a new Story, etc.

Expand ND so the can get a game out each year like Inzomniac.

Start showing Sega some love to get some more exclusives from them.

it have alot of games now and plenty in the future

I disagree with most of the posters here. You don't create huge franchises by creative derivative games that imitate what other developers are already doing; it's foolish for Sony to try and out-Halo Halo with extremely similar games. Yes, Killzone 2 is an exceptionally well made game with high production value and outstanding multiplayer. At the same time, it's extremely similar to Gears of War. Sony is never going to get a true breakout hit by developing shooters that are imitative of so many others already out on the market, no matter how well made they happen to be. Ditto for any kart racing spinoffs - Nintendo has that covered already, don't waste your time.

The good news is that I think Sony has a good chance to develop something genuinely new that could be a major hit. Ideally, it would be something that leverages the unique features of the platform that can't be duplicated elsewhere, so possibly something that makes use of hard drive space, free online, Blu-ray content, etc. I liked the direction that Little Big Planet took, and potentially something really creative could emerge from a focus on online community/user-driven content. I don't know what form that would take, as we're talking about a game/franchise that doesn't exist yet! But Sony has talented people, they can come up with something.

I also think Sony would be wise to bring back a central mascot/face for their platform; look at how well the Crash Bandicoot games did on the original Playstation. It would need to be something with a lot more universal appeal than God of War or Uncharted, however.

Sony's best chances are monoplizing on their two sports franchises, they're really close with MLB the Show.  Now all they need is to pick it up with their NBA franchise, this would really raise the PS3's appeal with Minorities and would help them greatly with profiting, seeing as how they most expensive part of selling the game would be the marketing. 

But Sony does have the  means to make some more really great franchises.  They just have to choose to pursue markets that will be more receptive to their games (i.e. not making more hack n' slash games - as none will ever come close to even 4 million - and instead going ofter a more popular genre).

Each of the big three have the money and incentive to make some amazing games.  They just need to find the people to do so.  Look at Nintendo.  Then went to Sakurai to make them a fighter, and he came up with the amazing and unique Super Smash Bros., a game so innovative it was initially lambasted for it's differences from other fighters at the time.  Now it is by far the best selling fighting franchise ever.  Sony and Microsoft have also had great success when forming internal studios to make new IPs.  Polyphony Digital and Turn 10 are two of the best racing sim developers out there, and both Gran Turismo and Forza sell very well.  Sony, through the aquisition of Guerrilla Games, also managed to turn Killzone from a low-7s caliber franchise to something that hits 9s almost across the board.  Killzone 2 is also Sony's fastest selling first party title since GT4.

They have the means to do this, they just need to do it. As much as I love how Sony goes after niche titles like Patapon and Shadow of the Colossus, or how they love to support smaller genres like hack n' slash with franchises like God of War and Heavenly Sword, they need to go after something bigger.  Well, they don't need to, as games like Heavenly Sword easily sell enough to be profitable, but it would certainly help them to turn a profit on the whole ps3 business (look at how much cash MS raked in the quarter Halo 3 hit), and it would give them a larger arsenal of "system sellers" to utilize next gen.

I think the issue with Killzone 2 is that the shooter genre has gone just about as far as it can go.  Sure, you can throw in melee combos like in condemned, a chainsaw like in Gears, Killzone 2's continuous rounds in multiplayer, or other small stuff, but you don't really change things unless you start attempting to fuse multiple genres, like Bioshock.  Ultimately, a shooter is a simple thing. You point, and shoot.  The analog sticks and the fire button are what you spend most of your time using.  You can't really improve that, outside of changing controller types, but then mous/kb has everything beat.

Sony's issue is that their most innovative stuff comes from genres that will probably never, ever be big, no matter how much the genre is improved.  Sony needs to tackle genres that are quite popular, and that are still growing and evolving.

Their NBA series is dying.  08 sold half that of 07, and 09 sold halo that of 08.  It's currently sitting at around 40k, and the critical acclaim isn't lloking good for the series.  I wouldn't be surprised if Sony axed the franchise like they have past sports franchises.

Sony is doing great with the MLB franchise, but that only caters to the US, and MLB games cater to a very small part of the US.  Last year, MLB 2k and The Show combined on ALL platforms barely broke 2 million.

The NFL is out of the question, so soccer (football) is the only place they could attempt to tackle, and if they could pull it off, that could be a major weapon.  If they could trump Fifa and PES, that combined with GT would help them to (literally, I think) dominate Europe.

Of course, it would never happen.  Sony San Diego are their sports guys, and they don't deal in European stuff.  The reason the MLB games are so good is because the team are such avid MLB fans.  Sony tried their hand at soccer years ago, with Sony London working on the series, but it just didn't work out.