I don't see how singling out the playstation 3 makes your point. If you're talking about nintendo shifting more consoles than other gaming consoles shouldn't you also consider the xbox 360 as well? You've mentioned a few times about micro$oft and the xbox 360 but you don't critique them as much as you do to sony and the playstation 3.

If anything, your thread should've been about both the xbox 360 and playstation 3.

@WereKitten,

Correction hopefully R&D will pay for itself overtime.  It has been said many times in this thread, but it is the market that controls how long the PS3 stays on the market (unless Sony discontinues production).  Sony would still be manufacturing the PS1 if the profit margin (not simply pure profit) was there.  The PS3 is in a bad position to last 10 years.  Sony has indicated that best case scenario the PS3 operations will profitable in FY2011 (April 2010-March 2011).  It is virtually certain that MS will announce the NextBox will be announced at E3 2011.  Certainly the NextBox will show that the PS3 is indeed not "futureproof" because nothing is.  As it has been said this puts the PS3 in the position of still being at a costly price (compared to the 360 and consoles 5-6 years into its life) not nearly the most powerful and not the budget console.  

The key then is what do the retailers start to do.  Already we have seen retailers trim the size of PS3 section in stores.  The CostCo by me still sells PS3 hardware, but they dont have a dedicated PS3 software section any longer. What will it be like 2-3 years from now?  Tell you what it wont be better.

I agree with much of your post, actually, about the profits and the retailers. A few notes:

1) I should have formulated it "R&D might pay for itself..." indeed, but my point was to answer Squilliam's previous post about what caused the losses at SCE. Thus I was talking about R&D in general, as in: each time you invest in research and development, it is supposed to pay for itself in the future, but it is accounted as a spike in expenses.

2) "Sony has indicated that best case scenario the PS3 operations will profitable in FY2011 (April 2010-March 2011)". Can you give me a link for this?

3) "futureproof" is indeed a stupid PR term, and as most of them it can't be taken at face value.

4) PS3 at a costly price in 2011/2012 compared with the 360? Once you hit the right price bracket, inner differences are marginal. If in 2012-2013 the NextBox has been out for a year at about $400, a $200 PS3 will look much more appetible than a $130-$150 360. The 360 will look more outdated because it won't read all optical formats, wifi will have made inroads in most homes (unless they release a new SKU with wifi), and because it will most likely be perceived as the "cheap" machine next to the new MS console. The PS3 will actually be affordable enough by then that the "more bang for the buck" actually matters and it might have the place the PS2 has had for years even after the 360 was introduced: serviceable if not up-to-date hardware, doubles up as a good optical reader / media box, good cheap library when compared with latest console.

I am ready to bet that the introduction of the NextBox is going to cut the 360's legs much more than the PS3's.

Also remember in the N64 era when Sony managed to make the PS1 often seem more powerful then the N64 through use of FMV? A similar occurance could simply happen again where the PS3 ad's etc. Feature lot's of FMV and people will actually do research in order to see that 720 is in fact that much more powerful. Bluray and it's capacity will aid in this endevor.

Just as a consideration, every argument that could be made for the PS3 being the "Longest Lasting" console with the most appeal after the next generation begins could also be made about the PSP; and right now, after 5 years on the market, the PSP is the system with the largest year over year decline (over 30%) and has less games with a release date set before the end of the year than the Nintendo DS has for the end of July.

At the same time, people constantly argued that the PSP would receive huge boosts in sales due to price reductions, and it would have been under $100 by the time it had been on the market for six years. The "huge" boosts in sales never happened because the PSP only (really) appeals to a very narrow demographic in any large numbers; and the price reductions never were as fast or as large as people expected because it is much easier to develop a inexpensive with good performance per dollar than it is to reduce the cost of an over-engineered "powerful" console.

When you factor in that the PS3 is tracking behind the PSP in Japan and North America, and is (basically) keeping pace with it in the other regions, I think it is fair to say that it will be a challenge for the PS3 to do as well late in the generation as the PSP has; and for the PS3 to last as long as the PSP will would be very unexpected.

First, I am really upset with how my paragraph came out. I need some spell check on this forum.

To all your comments: Yes

• Sony is not a part of the industry as we would think. Nintendo makes all their money off of it. As does Sega, EA, Activision, Ubisoft, Square-Enix, Temco(who is now merged with Koei) and so on. Sony has other sources of income. They tied themselves to the industry by using their other products in a gaming machine. They were trying to disrupt computers though games. They are not dependent on it and can leave at any time. The companies I mentioned can not.
• Investors will probably want the PS3 gone, asking why they are in an unprofitable market. If Sony can not turn it around in terms of profitability, expect to see the investors deny a PS4. Again, Sony is not a game company. Nintendo can always gets a game system past their investors becuase they invested in a video game company. Sony investors invested in a hardware company that deals in entertainment. They are numerous outlets besides gaming.
• Lay offs happen. Heck, they will happen now in an economic turn down. Labor is a company's highest cost. Easy way to shead it right? They may keep a few. but I expect most will be laid off and the others will make software for other systems.
• 1) renounce to the revenue and 2) renounce to the living room? Huh? First, profits matter. Revenue does not. Sony isn't making profit. You always make some kind of revenue. For two, there is not some mysterious battle for the living room. They are just trying to make money. There is no point for fight for the living room if it isn't going to show a return. The PS3 has been losing money for about 3 years. It sounds like they might be done with it.

@smashchu2

"I love your counter to my argument on consumers. Rather then try to disprove the claim or face it head on, you dodge it by delfecting claiming it as my opinion. But I may have not been discriptive enough, so I will explain futher."

My counter was perfectly valid as you gave an opinion and so did I and I even prefaced it by saying it was my opinion. But as you have detailed the reasons that you have your opinion I will give more details as well.

You claim that a slim PS3 will not matter and that a smaller size is only a factor for portable devices like the nano, or dsi. Of course a smaller size is important for portable devices, but there is also value in aesthetics. A slimmer PS3 will be aesthetically pleasing, and consumers want electronics that they feel look good in their living space.  If they didn't, all dvd players, surround systems etc would be big, bulky and companies wouldn't bother spending huge amounts of money on design.

You also claim that the price doesn't matter and that a less expensive slim PS3 will not change anything. I can only say you are wrong about this. Consumers have a price to performance bias, a bang for the buck if you will and are only willing to spend x amount of dollars on y product.  The Wii was in the right price point when it came out but to most consumers the PS3 price point put it in a luxury item market. Now if a slim PS3 puts it into the sweet spot as far as price is concerned it will indeed help to stimulate sales. As an example, take a look at the Xbox360 which was consistently being outsold by the PS3 and many on this very site were claiming this was the end for the 360, but MS cut the price, which put it into a price bracket that consumers were willing to buy it and since then it has been outselling the PS3.

Now you also claim that Sony is driven by technology and that they don't care about the consumer. Well I think that the idea of having a console that is around for 10 years is very consumer oriented. Right now I have an xbox which has become a large paper weight, but I still play games on my 9 year old PS2 and if MS rushes out and releases a new XBOX they may end up like SEGA with consumers feeling cheated and refusing to buy the new console that has a very limited life span.

By the way, you never addressed my question about why 3rd party suppourt would abandon the PS3 when they are making money off of it. I just don't see these 3rd party ignoring a console that sells huge amounts of their software and find it hard to believe that companies like Activision or Rockstar Games would refuse to develop the next COD or GTA for the PS3 when they sell millions.

1) I understand what you mean. But what you said doesn't mean that. If you want Sony is not exclusively in the game industry. As they are not exclusively in the computer industry or in the TV production industry.

2) What does "want the PS3 gone" mean exactly? Numbers tell that the PS3 per se is now bringing a profit with each console sold. Stop making PS3 and selling them and you're losing marginal profit now and potentially bigger profits in the future. Money spent in the past stays spent. So I reiterate my question: what is the business sense for investors to ask to cut short the life of the PS3?

SCE is more than the PS3. And its losses and profits and investments and expenses are not entirely on the PS3 shoulders. More than that, we don't have the details to financially split the PS3 from the rest.

3) Again, most likely their studios are profitable, and more so as developers for their own console than for other systems.

4) I know that profit is what counts. And yet with great investments done in the past for R&D and infrastructure they are certainly going to look not only for enough revenue to have a marginal profit, but also to cover past investments. The battle for the living room is not mysterious at all. It's what you called "disruption of computers", except that it's not about the computer at all, it's about the media, entertainment, net service box.

@Smashch2

"Investors will probably want the PS3 gone, asking why they are in an unprofitable market. If Sony can not turn it around in terms of profitability, expect to see the investors deny a PS4. Again, Sony is not a game company. Nintendo can always gets a game system past their investors becuase they invested in a video game company. Sony investors invested in a hardware company that deals in entertainment. They are numerous outlets besides gaming."

Just so you know, investors do not have a say in what the company produces. Sure the investors can be upset and they can voice their opinion by selling their stocks, but as far as votes go,  it is usually just to vote for who will be on the managing board (and the choices are limited), and when the company will make changes to the stocks which will directly affect them such as a stock dividend, stock split or merging with another company. Sure, keeping the investors happy is a goal of any company, but that doesn't mean they can stop the PS4.

yeah! lets kill the ps3 right when it starts bringing money so that way we'll have no chance in making the money back! AWESOME! (BTW Sonys president or what have you said they are only losing 10% on each ps3. therefor there must be something else sucking up money... hm lets logically think about this what has been in the news the last year and hurts businesses... the economy? no that couldnt possibly be the reason)