I thought sony was on budget to what they predicated the PS3 was going to do? They weren't planning on having huge sales (Correct me if I Was wrong, I thought they were planning on the ps2 to keep bring in sales). Plus their TV, Walkman and phone department is where they are taking a heavy beating.

edit dont get me wrong i know they are losing $ on the ps3 but I believe that was part of the budget the originally planned for.

A price cut and/or a slim model would be like putting a band-aid on a shotgun wound. The PS3 was essentially the suicide of Sony's gaming division.

So, yes, dead console walking.

No not really, even looking at the recent gamefaqs poll close to 66% of people either owned or wanted a PS3. Most people are holding out for a price cut , more sales = better for console as a whole.

http://www.gamefaqs.com/poll/index.html?poll=3530

The ps3 is not a dead console walking, as despites its price point it has already overtaken 1 of the 3's last gen consoles in sales (gamecube ) & in the next few months will surpass another (xbox), now nintendo obviously didn't die after the gamecube so why say sony would?.

@Dno

Consoles sold to whom. Your article doesn't clarify. Sold to retailers, or sold to customers. I would like to think you are familiar with the concepts of channel stuffing and hoarding. Kudos to you for going to the source rather then linking to a thread in these forums. Where everyone probably said the exact same thing I just did.

You have a interesting definition of flame bait as well. You need to understand the difference that exists between contentious and insightful. Nobody in this thread seems to be irritated or irrational. Must mean that it isn't flame bait.

@Kzoellner

No Sony is off both on losses and being able to meet projections. Simply put they expected to have greater demand, and were forced to reduce the price. Which cost them a mountain of money, and they still aren't where they wanted to be in sales. They didn't plan on being a distant third, but then again nobody did.

@evil_kenshin

Answering your last question Nintendo follows a traditional model. They sell things at a profit out of the game. So no matter how many they sell they are going to be making money. Sony follows the loss leading model. They start off selling at a loss, and then as manufacturing costs go down they start to make money from consoles sold, and from secondary revenue.

That sounds all well and good, but Sony had to drive down the price of their already unprofitable console so fast that we are still three years into the manufacturing cycle, and the console still hasn't reached price production parity. That doesn't mean they cannot start to really do that soon. However a lot of members are saying that Sony must have a massive price reduction or else. Maybe some day we will get more of an answer then just blowing off steam. I know what I am thinking, but I am clueless to whether they are even thinking.

@ evil_kenshin

Because the Gamecube was profitable? And because Nintendo had a massively profitable handheld to fall back on? (The PSP is doing fine but it's not the GBA.)

After checking the charts, I have to say I don't know where you're getting the idea that the PS3 doesn't see plateaus from price cuts.  I see Sony getting a massive plateau, which has just recently petered out.  Perhaps Microsoft can simply afford to refresh its plateau effect while Sony cannot. 

Because neither Nintendo nor MS lost money on their last gen consoles, and neither got financially gutted the way Sony has the last quarter.

Incorrect , The xbox lost microsoft 4 billion. 

http://www.joystiq.com/2005/09/26/forbes-xbox-lost-microsoft-4-billion-and-counting/

MS probably had/has revenues to make up for that from Windows, Zune, XBL, Bill Gates' sofa, etc.