@theprof00

I will dispel your points which are debatable with simple direct logic. You aren't necessarily wrong in conclusion, but marketing is a response to absolute necessity. More exclusives are a response to the console being more viable specifically in Japan. Cost reductions are where everyone is tripping. They are not linear in nature. You can lose cost reductions, and in fact the price of production can actually go up.

I know I just lost a few people. Before you throw a tantrum hear me out. Cost reduction has three legs upon which it stands. Those are components, design, and efficiency. The last is actually the most important. Unless efficiency is increasing or at least optimal then you have two problems components begin to accumulate liquidity, and decreased production actually increases production cost per unit. Say you can build ten consoles an hour, but now you are only allowed to make six consoles. You will still be paid as if you made ten consoles.

Why am I going on about this. Sony is not meeting projections in fact they are down year over year. So they must actually produce fewer consoles, or they must produce as many consoles or more, and then stock pile them. Either way Sony must actually be losing money on the console side of the equation. Either the reductions have slid to a stand still, or they are locking up cash in a warehouse. Either way they still must account.

Basically Sony being down year over year is all the proof you should need. It precludes any effective cost reductions, and as you pointed out Sony has actually had to spend more to maintain current diminished sales. All of this before you can even begin to think about research and development costs.

thanks dodece for providing contrary evidence in a mature way. I totally agree that it is a possibility, but it doesn't necessarily discredit my assumptions either. It is just a good counterexample. The reality is that we don't actually know what they are doing with production, and in fact could be stockpiling them away for the coming holiday seasons. I should remind you that Sony set a pretty large expectation for sales in the 10 million range, which will only occur if they have a price cut in the near future.
So even though your evidence is good, there's still a pretty good chance that the exception you mentioned is true.
On top of that, between jan 08 and july 08, GTA4 and GTP came out, which is a big reason for those numbers being high. In your evidence you made it seem like Sony was doing this because they were nervous and doing it solely to recoup sales. However, I really doubt that Sony is treating this YOY drop as a problem with the console, but rather that a GOTY came out last year, and hasn't this year. I believe that they see this situation as normal.

Top 3 Halo games = 24.81Million sales.

Top 2 Gran Turismo games = 25.72Million sales.

I could add more and make it top 4 for each, but i dont want to embarass you that much.

Gt3 says hii!.

edit: the post above me did it better

talk about embarassing carl

Thanks Carl lol.