Console sales don't exist in a vacuum. Sony has made a significant investment in the PS3 and lost at least half of its market share. MS on the other hand at least doubled its market share with a comparable investment, but even that is a mixed result, considering the costs.
I'd say the only clear success in this generation is Nintendo.
I agree with you completely.
The final result for both companies will be more or less (in two-three years time) the same. Both of them have invested big amounts of resources, and the install base will probably be even worldwide speaking. The distancie will not be more than 10-20% I bet. And that´s is healthy enough to consider a retry.
Obviously they´re going to earn or lose money; in MS case the big earnings (assured) are in line with the profitability of the company, so they´re not decisive, nor negative, of course. In Sony´s case the situation is quite more complicated, so being profitable is more than an issue, but at the moment, with the hardware being profitable, their biggest problem is the software sale rate, and side by side, the piracy fact.
But if that´s not really hurting (we´ll see soon) they are in a good point to reduce the price of the basic SKU and make their SW roll, with a bigger profitability margin with the I+D costs being less important, having their game engines in good shape since some time.
So, what´s really important may be? The mindshare they´re gaining during the few years that lasts before next gen. That´s not decisive, of course, but we already know that the first year of a platform generally draw the future of it, so starting really fast and strong is more than an issue.
And that´s the most important thing for Sony now, and because of that (and because they need time and good thinking in order to "clean" and make their services and platform cohesive -the biggest fault I find in their proposal now- it´s absolutely decissive offer good games and mantain the respect that their releases have between core users.
That is, what they need now is to produce good games, explore innovations and follow the path of the casual offerings, because it´s fairly clear now that they will have to wait to next gen to change their strategy. Who will be out next, decissions about cost and performance, put their technology (generally really good) at the service of the bussiness and not just make exercises of style... Sony will have an opportunity next gen to do it.
So for me it´s pretty clear that Sony just has to reconstruct their on-line platform, offer the same services (some of them superb) just with a common idea and unifying resources (Home is a good example of spasmodic valuable offer just not integrated in the platform enough clearly), while still building up the respect that core users seem to have with their best releases (LBP, Uncharted, and the like, and decissions like the support to really die hard games like Demon´s Souls). Why? They will need them not only now, but next time.
And I really think that "next time" will have casualties. Because Sony hasn´t yet the survival instinct that Nintendo has showed with Gamecube and, to a lesser extent, Wii. So they better will be razor sharp with their offer, or the possibility of being out of the bussiness will be substantial.
And that´s a problem, because I like Sony products. They just don´t have the right framework, and vectors are not in line. Too much effort wasted in good ideas in the wrong place or time. It´s evident that being a SW company and offer a SW on-line platform is charging their toll.
