Veder Juda said: First and foremost, it means they can stay in business; while some people think the PS3 is virtually invincible because it is backed by a major electronics giant, every division in a corporation operates with the sword of Damocles hanging overhead. Divisions that lose money are the first targets when cost cutting measures are brought in, or axed completely; a corporation will only keep an unprofitable division around if they can show they will return to profitability relatively fast, or they have some ulterior benefit to the company.
Initially, the PS3 was also the market leading Blu-Ray player, and was needed to spread the high def video disc to the masses, and the past success suggested that the PS3 would become the market leader and make a lot of money in the long run; so the executives were willing to let the PS3 take a big loss in that first year. That was three years ago. Blu-Ray has not taken off the way DVD did, so the PS3 failed to make Blu-Ray the standard, and with standalone players becoming more common, it is no longer needed for that purpose; and with it stuck in 3rd place for it's whole life, it looks like the PS3 can never dominate the market. If the PS3 keeps losing money, the executives at Sony may decide it's not worth keeping, and kill the console. |
I agree with most of that post, but I think the PS3 will be profitable at some point, maybe 2010, regardless of it's podium standing in the console war. I agree that market domination is out of reach at this point. Even if by some inexplicably horrible manuevering by Sony they managed to never reach profitability (highly unlikely scenario), they would have to stick with the console to stay in the race for the next round. Sony isn't going to abandon the market or that division. They will hope that the PS3 can make enough money to fund the R&D of the PS4 (as mentioned by someone above). In the grand scheme of things, Sony knows that division can be profitable. They had 2 console generations of domination. That has not been forgotten by top brass or shareholders. To kill a division after one bad generation would be premature, especially when they can chalk up many of those mistakes to some poor design choices and bad market positioning. I think they have more faith in the new guard at the division, but that new guard is still stuck with the legacy problems and won't be able to show how much better they have a grasp on things until they can come out with a new console. Unfortunately, they can't just abandon the PS3 and jump right to that PS4. The ship they are stuck on at the moment is the PS3 Titanic and they are trying to patch the scar from that iceberg. They are just lucky that had all those PS2 profits and continued PS2 sales to hold that ship up. The ship is still moving and will likely reach port with it's new crew, but it has been an ugly journey.
At least they won't have to do the R&D for the media drive since they will undoubltedly stick with Blu-Ray. The big question will be if they decide to sink more development into the Cell processor line or go with something that is closer to the mainstream and easier for programmers to develop for at the start. They'll go with whichever gives them the biggest bang for the buck. After Sony's top brass drummed Kutaragi out of the division and reigned everyone in after the launch fiasco, I think the next console will be of a more fiscally conservative design.
I give this thread a 9.6.