What if Sony's PSP had literally been a portable PS1 and had the same design as now but had no media features? And what if Sony took a loss leading startegy and it retailed for $100 WHEN IT LAUNCHED? For a launch line-up (and throughout the PSP's life), Sony could have re-realsed all the popular PS1 games for PSP at $19.99 and call them "PS1 greatest hits-only for PSP" and then have normal games at $29.99-$34.99. What if FF7 and FF Tactics were launch title games? The DS would be dead by now. Considering the DS's and PSP's bad first 6 months, there is no way the DS would have survived. The PSP would have done amazing, and Nintendo would have been forced to use there backup plan- fall back on GBA while they develop the next GBA (which was rumored to be going to have PS2 level graphics and somehow be cheap) Even if Nintendo realsed a new game boy, Sony's PSP would likely fight it off with a lower price; in fact, the hypothetical Sony PSP could be at $59.99 right now. Then Sony would have all the software sales and wold be making a huge fortune, even if they lost money on every hardware sold through year 3.
Sony could have done something similar with the PS3: Have the PS3 have no media features, have graphics in the same caliber as the XBOX 360, and launch at a loss for $299. $299 PS3 vs $400 Xbox360? I don't know how the Wii would be doing, but the 360 would be smoked, considering the momentum and hype the PS3 had in its first 4 months. If the PSP had been a ragin sucess, the hype would have been even greater, and if there were no supply issues, PS3 would have taken off like a rocket. In my personal opinion, Sony has made some very bad decisions lately in their video game department. Do you think Sony would still be the video game market leader (or perhaps dominating in both portable and console sales) if they had followed a business model similar to what I have stated above?
(P.S. this is for hypothetical discussion, which I find fun. I am not trying to be a Sony fanboy, as I am not one in the slightest. I actaully prefer Nintendo games the best, but I am not a fanboy to any console. I can see that they all have something to offer- [microsoft one thing nintendo another, and Sony with the PS2 had a good mix of both worlds] So please don't accuse me of being a Wishful thingking Sonybot)