Shutdown an entire division due to short term losses?
We are not talking about short term losses here. That may be on the surface but it should be more than obvious by now that Sony is in very deep trouble.
People, the Wii has sold more than
five times as many units as the PS3 in november!
It should be completely clear by now that at least half of the PS2 user base was made up of casuals buying games that we haven't even heard about. For every Final Fantasy, Gran Turismo and Metal Gear there are dozens of small titles; cooking games, dating games, train simulators, and so on, that usually don't even sell a million copies. But the numbers add up in the end, and these were the largest chunks of Sony's income.
And now, Nintendo has managed to take away this market segment from Sony, there can no longer be any doubt. They're not bringing in some huge, previously unknown market segment consisting of grandmothers and housewives, it's mostly the part of the PS2's user base that we've not really payed any attention to. We're talking about as many as 50 to 80 million users here, who will not buy a Playstation in this generation and there is
nothing Sony can do to stop it.
The outcome of the current generation has been decided years ago, when Sony choose the expensive high tech machine and Nintendo choose the cheap machine with the Wiimote. The market is changing slowly, but it's because it has terrible momentum and thus it will take years to change it again, this time in Sony's favour.
Personally, I think that Nintendo is going to end up with close to a hundred million users and since they're years ahead of their competitors, they'll easily hold on to them in the next generation as well. MS and Sony can't just simply copy the Wiimote and turn the market around completely.
Only by the time of Xbox4/PS5 will there be a chance to come up with something completely different, that stands out and captures this casual audience that makes up more than half of the market. I don't know if it's going to be a new input device, a new output device (virtual reality or true 3D or whatever, doesn't really matter), or a new approach to game design or developer relations, or whatever, but it'll take something radical.
The X360 vs PS3 debates are completly pointless here. After this december, Nintendo is going to own one half of the console market and they'll continue to grow their market share rapidly. MS and Sony are fighting for the
leftovers - and Sony's losing this battle as well. This is the result of all their minor mistakes, like pricing and time to market and so on, but even if they got everything right they'd still only have half of the Wii's current sales - a mere fraction of the PS2 user base.
So this is why I say that Sony is in deep trouble. It's pretty much decided already that they won't be able to take their old user base back from Nintendo with the PS4. Again, sticking a Wiimote on top of the machine won't help, and casuals don't care about shiny hardware or the next AAA action games at all. No FFXIII or KZ2 or even GT5 will be able to win those gamers back.
PS4 may be able to contend with the next Xbox better then the PS3 does with the current one, butl that's still no more than 50-60 million potential customers. So they're looking at a seriously reduced income for another 8 years or so, and they'll have to come up with something super cool on this foundation to try to take the leading position back from Nintendo. The good news is that ideas don't cost as much money as developing another Cell or Bluray - if Nintendo was able to do it with an empty pocket, then Sony should be able to do it as well. But it'll take a lot of time nevertheless.
This is why I've mentioned that in this situation, even the drastical decision to shut the console division down completely
would make sense. They have to make some serious changes anyway, and there's no guarantee that the Playstation brand will become king once again sometime in the future. So maybe it's not worth spending a lot of money to fight for it, but only Sony knows the numbers.
And noote that I've only been talking about the possibility, but everyone has taken it a bit too seriously...
But my main point is that Sony is in a lot more trouble then most of you guys are willing to admit it. They've lost at least half of their old user base, and thus at least half of their income, for two generations and they're completly helpless to do anything about it; what's more, they're now at the point where MS is seriously close to take away all that's left for them as well.