PS4 "Isn't Allowed" to be Another Failure, Says Sony Exec

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PS4 "Isn't Allowed" to be Another Failure, Says Sony Exec

The PS4 is Sony Computer Entertainment's last chance to prove that its entertainment sector can be profitable.

Despite the appearance of widespread success (particularly in Japan) the PS3 and PS Vita have not met the profit margins that Sony was expecting. Sony Computer Entertainment president Andrew House addresses the concerns that the PS4 will tread the same path, telling popular Japanese magazine Diamond Online that "Sony Computer Entertainment isn't allowed to fail anymore with PS4."

House firmly believes the PS4 can't "fail" like the PS3 did, because "the game business for Sony is a 'Core' [business] that embodies a fusion of both hardware and software." This announcement comes after an earlier suggestion from a majority Sony shareholder that the electronics and insurance giant sell off a majority of its entertainment business in favor of more profitable endeavors.

The suggestion was shot down by the board of directors, meaning all eyes are firmly fixed on House to see if he can walk-the-walk with the PS4.

This certainly explains the much more cautious approach Sony is taking with the PS4, choosing to let competitor Microsoft make all the sweeping, controversial changes, while quietly giving its fans a much more moderate console at a lower price point. We'll have to wait and see if it pays off for House, but early pre-order numbers are certainly looking promising.

Source: Diamond Online (Japanese) via Dual Shockers

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And when the console industry inevitably fails (maybe not this generation) due to the insane expectations of these corporations, what's gonna happen to video game industry? My opinion: Renaissance.

Honestly, the best thing they can do is make it easy for third-party companies to develop/publish games for it. Isn't that how the PS2 got to be so insanely popular and successful?

Nooners:
Honestly, the best thing they can do is make it easy for third-party companies to develop/publish games for it. Isn't that how the PS2 got to be so insanely popular and successful?

Actually the PS2 was kind of a pain in the ass to develop for, certainly compared to something like the Xbox because the architecture was kind of odd. Maybe not as hard to develop for as the PS3 was though.

But when the PS2 came out game development was in a much different place. They were coming off of the PSX which was basically the most successful home console at the time (and is still the second most successful console, and just to put things into perspective, outsold the most popular consoles of previous generations by 40 million or more units. It literally crushed the competition in terms of install base), Japanese developers were still king and wouldn't touch the Xbox with a ten foot pole while Nintendo lost a lot of third party support with the N64 for some very good reasons, and weren't able to win it back with the Gamecube, in no small part due to Sony's willingness to let pretty much anyone do anything on the Playstation systems. Pre-built game engines weren't a thing yet, game development tools were usually developed in house as often as they were licensed from another company. And if all of that weren't enough the PS2 was completely backwards compatible and had access to what was probably the largest game library in history from day one.

All of that kind of added up to a console which was tricky to develop for, but no worse than developers were used to already (probably beat coding games in assembler at least), a console which got a lot of support since it was the obvious purchase for people who bought Playstations and was less restrictive to developers, and it also had all of the sequels to some of the biggest hits of the previous generation and represented the time when 3D games on consoles really hit their stride and had kind of figured out what 3D was all about.

TLDR: The game industry was a much, much different place 13 years ago.

Adam Jensen:
And when the console industry inevitably fails (maybe not this generation) due to the insane expectations of these corporations, what's gonna happen to video game industry? My opinion: Renaissance.

It's going to continue on on PC, mobiles, tablets and lose all the big multi billion/million developers.

So we will end up with more Payday 2's and allot less Call of Duty's.

Of course that's not to say there won't be some fallout, I imagine Rockstar and other popular Dev's will suffer due to losing 2/3rd's of their market which means they won't be able to create anymore GTA's or such at least not at the current price.

Interesting. So if the PS4 fails to turn as big of a profit as they want, and the Xbox crowd winds up bowing out of the market as well, who's going to pick up the slack? Certainly not Nintendo. If this winds up happening, I predict either a bunch of fresh consoles from smaller companies, or a lot of panicking publishers and dead devs.

EDIT: Oh hey, I just remembered that Valve is making their own console. SO that's happening already.

Adam Jensen:
And when the console industry inevitably fails (maybe not this generation) due to the insane expectations of these corporations, what's gonna happen to video game industry? My opinion: Renaissance.

Or it'll have to be pulled off the cliff again by Nintendo. Personally, if this happens (its doubtful) and games need to be saved again by the likes of Nintendo, I'll most likely be done with gaming as a hobby. It will have failed me as a medium.

The publishers and these corporations don't know what they're doing. They might just spend themselves into oblivion and pull the plug on their gaming divisions once the well runs dry. When that happens we'll be left with PC games and indie games. As long as there are two or three good games for every FEZ, I think I could deal with that.

Well, I'm one of the ten people who still thinks there's potential in the console industry and I think Sony is doing it right with the PS4 so here's hoping they pull it off and don't shoot themselves in the foot.

Adam Jensen:
And when the console industry inevitably fails (maybe not this generation) due to the insane expectations of these corporations, what's gonna happen to video game industry? My opinion: Renaissance.

My Opinion? Nintendo and Valve will be the only two left around that matter (Thanks to the Money they've saved or made), Microsoft and Sony will completely leave the Video Game Market, many 3rd parties, especially Medium Japanese and Big American companies, will go bankrupt, and Video Games will become Niche again.

OT: I really hope the PS4 can pull it off, but the future isn't set in stone. Let's just hope and wait.

The PS3 certainly had a slow start, but a failure? too bad we don't have access to what happens in the background to have a clearer idea of what they mean.

Adam Jensen:
And when the console industry inevitably fails (maybe not this generation) due to the insane expectations of these corporations, what's gonna happen to video game industry? My opinion: Renaissance.

Valve pull an ace out of their sleeve and announce Half Life 3 will be the sole launch title on the steambox, bringing about a new age in game-o-tronical designing. Gabe Newell is pronounced Godking of Earth and as his first act send all executives and shareholders of gaming companies are to be launched in to the Sun. Which will become the plot to the decades best selling game.

Or maybe we just embrace indie developers more, people try new ideas for games instead of relying on samey franchises and the people who were only interested in making money from gamers piss off and invest in shark-warmers (they're the next big thing).

Heck, maybe a future robotic Shigeru Miyamoto will travel back in time from five hundred years into our future to save us with...Mario.

twm1709:
The PS3 certainly had a slow start, but a failure? too bad we don't have access to what happens in the background to have a clearer idea of what they mean.

I think what they mean is that the Sony bigwigs were expecting the PS3 to literally shit money in to their bank accounts. It didn't make as much as they expected and so they branded it unsuccessful despite actually doing ok in the long run.

I am NOT a playstation fan. I support the xbox, will continue to buy xbox, etc. etc. With that said, I honestly and truly wish for success for both the PS4 and the Xbox One. If we lost either of these, the other will suffer, as will the consumers. Having both consoles being successful is a win-win situation for gamers and supports of both the xbox and playstation brand.

The PS3 was a "failure"? I think the Virtual Boy might have something to say about what constitutes a "failed" console.

erttheking:
Well, I'm one of the ten people who still thinks there's potential in the console industry and I think Sony is doing it right with the PS4 so here's hoping they pull it off and don't shoot themselves in the foot.

Agreed, consoles aren't going anywhere, they're too convenient. If Sony and/or Microsoft were to disappear any time soon (which I don't think will happen) then there would be a void left open in the games industry. And voids are made to be filled. Someone would come and pick up the slack, possibly someone more innovative. That said, I can't see anyone dropping out of games barring massive failure.

Has Sony been taken over by Square Enix?

You've already won the next bloody generation. Only an executive could turn that into a failure.

Adam Jensen:
And when the console industry inevitably fails (maybe not this generation) due to the insane expectations of these corporations, what's gonna happen to video game industry? My opinion: Renaissance.

It's the begining of the end-zio.

Adam Jensen:
And when the console industry inevitably fails (maybe not this generation) due to the insane expectations of these corporations, what's gonna happen to video game industry? My opinion: Renaissance.

Second Renaissance. The consoles died out once already.

Well, they've had a while to learn, not only how to do it right but also how to do it wrong. I don't see them throwing it all away with the PS4.

Vivi22:

Nooners:
Honestly, the best thing they can do is make it easy for third-party companies to develop/publish games for it. Isn't that how the PS2 got to be so insanely popular and successful?

Actually the PS2 was kind of a pain in the ass to develop for, certainly compared to something like the Xbox because the architecture was kind of odd. Maybe not as hard to develop for as the PS3 was though.

See, this is a common misconception about the PS2 and PS3. The thing is, Japanese developers develop games right on the console itself. Its been that way for a long while. Western developers build the games on a PC and then put the game into the console in question. Its usually Western devs that say that the PS2 and PS3 are "hard to develop for". That's because Western developers build games in a fashion that takes more time. It's easier to port games to the Xbox consoles because its basically a Western PC in a box.

We've both seen tiny Japanese devs put out games on the Sony consoles and not complain about it being hard to develop for. And keep in minds its usually the developers known for releasing glitchy games calling Sony consoles hard to develop for. Like Bethesda. A good chunk of Western developers took the time to actually learn how to efficiently make games for the PS3(Quantic Dream). Companies like Bethesda have shown that they simply can't be bothered to do that, so every time PS3 owners get screwed in terms of quality, they blame the console.

I find it especially hard to take Bethesda seriously when they say it because they can't even release all of the Skyrim DLC on the PS3 because they never took the time to make their development methods work better with the PS3, and at the end of this console era, are literally the only big developer who releases a PS3 game that can't even make their DLC work for multiple platforms. That's a Bethesda only issue as far as I know and its kind of sad to see them be constantly out done in terms of programming by tiny Japanese developers and smaller Western Developers as well.

FireAza:
The PS3 was a "failure"? I think the Virtual Boy might have something to say about what constitutes a "failed" console.

It "failed" to make them enough money to buy the entire executive staff diamond hulled yachts.

I don't get it. I honestly just don't get it. Game developers putting insane amounts of funds into games, but are shocked when they don't turn a profit. Like many others I'm shocked at the wastefulness. Games have looked more beautiful than they were before now, but the content has started to sour. The little replay value I've seen in games has come from multiplayer modes. But then the next game comes out and interest is lost as people move to the next one. I've always rented games to prevent buying one I won't enjoy. Basing my purchase off screenshots and 2 minute videos isn't my style. The low sales are blamed on the used game market, but it's not the main factor. People can't afford the $60 games with all the increase in prices.

Now that's about the games side of the equation, why are the consoles hurting? This part is even more puzzling. People buying a console is similar to buying a car (a little less costly mind you). First Microsoft now Sony saying their systems were a failure. Mind you the Vita didn't sell well, but PS3 did (and it still does). As for MS why does it seem like Xbox is going under? Maybe both groups are connecting their game sales (games they've published) as an indicator of the system's success? Not sure what. Still no one wants either/any of the systems to fail. When they compete; we, the consumers, benefit. More innovation and risks are needed, but seems everyone wants to play it safe. And what they do spend more money on isn't productive or beneficial.

Vivi22:

Nooners:
Honestly, the best thing they can do is make it easy for third-party companies to develop/publish games for it. Isn't that how the PS2 got to be so insanely popular and successful?

Actually the PS2 was kind of a pain in the ass to develop for, certainly compared to something like the Xbox because the architecture was kind of odd. Maybe not as hard to develop for as the PS3 was though.

But when the PS2 came out game development was in a much different place. They were coming off of the PSX which was basically the most successful home console at the time (and is still the second most successful console, and just to put things into perspective, outsold the most popular consoles of previous generations by 40 million or more units. It literally crushed the competition in terms of install base), Japanese developers were still king and wouldn't touch the Xbox with a ten foot pole while Nintendo lost a lot of third party support with the N64 for some very good reasons, and weren't able to win it back with the Gamecube, in no small part due to Sony's willingness to let pretty much anyone do anything on the Playstation systems. Pre-built game engines weren't a thing yet, game development tools were usually developed in house as often as they were licensed from another company. And if all of that weren't enough the PS2 was completely backwards compatible and had access to what was probably the largest game library in history from day one.

All of that kind of added up to a console which was tricky to develop for, but no worse than developers were used to already (probably beat coding games in assembler at least), a console which got a lot of support since it was the obvious purchase for people who bought Playstations and was less restrictive to developers, and it also had all of the sequels to some of the biggest hits of the previous generation and represented the time when 3D games on consoles really hit their stride and had kind of figured out what 3D was all about.

TLDR: The game industry was a much, much different place 13 years ago.

Woah. Woah. PS3 > PS2 when it comes to ease of development.

The PS2 was a nightmare. It was so freaking weird. The PS3 is "modern" by comparison.

The PS4 is more or less a PC. :P Can't really fault Sony for not catering to ease of development anymore.

I believe not just the people behind the PS4, but others like EA expect to much due to competition. Remember when EA announced if Dead Space 3 didn't sell over 5 million copies, the series would be cut off and left for dead? Well first off why state such a warning? People will buy what they feel is fun and worth their money. Secondly, the other Dead Space games didn't sell that many copies to begin with so expecting the third one to suddenly sell 2 million over the previous is like expecting Mass Effect 4 that's coming out to outsell all three previous Mass Effect games altogether.

Also most companies misunderstand what a failure of a project really is. The PS3 did fine just wasn't the best thing out there like the Sony people wanted it to. That's not a failure, that is simply just a great console not being the next best thing and was successful in general regardless. A failure would be what the Xbox One was going to be if Microsoft wasn't going to fix those bad policies that the Xbox had featured. Imagine if Microsoft never fixed those unfair, corrupted policies and was going to sell it like when we first heard of it. No one would exactly buy it and not only would the Xbox One not reach it's destination in sales but probably not make enough to pay off the money that it took to even invest in making the console! That would of been a failure because of the people's decisions on selling it, not the console missing it's targeted money scale.

I called this shit years ago.

This is why people who say "Nintendo needs to die so that only Sony and MS are around!" are morons. Because it was inevitable that if Sony and MS performed poorly for extended periods (or at least, "poorly" in the eyes of shareholders) that they'd consider cutting out of the console market altogether.

Now Sony's finally coming out and admitting precisely what I expected was the case: that if the PS4 doesn't exceed expectations, it's likely to be their last console. And I imagine the same is true for the Xbone, since MS has already "lost" two gens in a row....and in a company used to winning, that's unacceptable.

xqxm:
What Microsoft shill wrote this article? How is a console better in every single aspect "much more moderate"? Is it simply because it refrains from introducing features that suck so hard for the customer that the features have to be removed before the console is even launched?

Jesus Christ, Escapist. If you're strapped for cash, there's a lot of things you can do to earn some other than accepting M$ bribes, and they may even allow you to keep your journalistic integrity.

I really don't think it's MS making them say this. If you recall MS said something very similar recently.

CriticKitten:
I called this shit years ago.

This is why people who say "Nintendo needs to die so that only Sony and MS are around!" are morons. Because it was inevitable that if Sony and MS performed poorly for extended periods (or at least, "poorly" in the eyes of shareholders) that they'd consider cutting out of the console market altogether.

Now Sony's finally coming out and admitting precisely what I expected was the case: that if the PS4 doesn't exceed expectations, it's likely to be their last console. And I imagine the same is true for the Xbone, since MS has already "lost" two gens in a row....and in a company used to winning, that's unacceptable.

When you set high expectations for anything you're more than likely to be disappointed. Profits may be good, but high profits are better. Are things so bad that these companies feel their products aren't doing well? I'm curious if it's truly bad sales or just comparison to other departments with less investment values.

xqxm:
What Microsoft shill wrote this article? How is a console better in every single aspect "much more moderate"? Is it simply because it refrains from introducing features that suck so hard for the customer that the features have to be removed before the console is even launched?

Jesus Christ, Escapist. If you're strapped for cash, there's a lot of things you can do to earn some other than accepting M$ bribes, and they may even allow you to keep your journalistic integrity.

I...what?

Seriously what? Its an article about something that Sony said... what does Microsoft have to do with this?

CriticKitten:
I called this shit years ago.

This is why people who say "Nintendo needs to die so that only Sony and MS are around!" are morons. Because it was inevitable that if Sony and MS performed poorly for extended periods (or at least, "poorly" in the eyes of shareholders) that they'd consider cutting out of the console market altogether.

Now Sony's finally coming out and admitting precisely what I expected was the case: that if the PS4 doesn't exceed expectations, it's likely to be their last console. And I imagine the same is true for the Xbone, since MS has already "lost" two gens in a row....and in a company used to winning, that's unacceptable.

Ignoring the fact that Nintendo would be in the exact same situation if the Wii hadn't, by complete fluke, become a massive fad, by what metric did Microsoft lose the 7th gen? They sold 80 million consoles and 819 million games, and have one of the most successful accessories in gaming history.

Toadfish1:
Ignoring the fact that Nintendo would be in the exact same situation if the Wii hadn't, by complete fluke, become a massive fad, by what metric did Microsoft lose the 7th gen? They sold 80 million consoles and 819 million games, and have one of the most successful accessories in gaming history.

You didn't read what I said, did you?

Let's try again, this time with critical emphasis on the part you missed:

This is why people who say "Nintendo needs to die so that only Sony and MS are around!" are morons. Because it was inevitable that if Sony and MS performed poorly for extended periods (or at least, "poorly" in the eyes of shareholders) that they'd consider cutting out of the console market altogether.

The actual success of the console is irrelevant. MS and Sony are run by their shareholders, and what we see as success is not what the shareholders see as success. It's as simple as that.

Microsoft didn't end up in first place in either of their previous iterations. They're very much used to dominating every market they enter into, so being beaten by their competitors twice in a row will create a negative perception in the eyes of shareholders, who already don't see the value in their involvement in consoles to begin with. That combined with pressure in their primary market from other competitors (Mac and the like) will lead to people wanting them to push off the entertainment branch (which is losing them money) and focus on their core products. Sony's in the same boat, losing ground in consumer electronics to Samsung and other competition.

Actual success doesn't matter. What matters to Sony and MS are the opinions of the company's shareholders.

Nintendo, by comparison, is a company fully invested in video games. They'll keep making gaming consoles until they fall over and die. Whereas for Sony and MS, it's simply a matter of one bad board room meeting. This is something that so few gamers seem to understand, but they need to understand it, because it's the corporate reality we face. If this gen goes poorly (and all indications suggest that it probably will), we're very likely looking at the next big crash, and we'll probably lose one or more consoles in the process. Maybe even all of them. Nintendo is in the best shape because of the Wii and 3DS, but there's no guarantee they'll survive, either. They're just the most likely to survive of the "Big Three" right now.

And can we stop pretending the Wii was successful because of a "fluke"? It was brilliant marketing that got the Wii its massive sales lead. To suggest that it was a "fluke" implies that the person making said suggestion is extremely arrogant with regards to what "real" gaming is. >_>

twm1709:
The PS3 certainly had a slow start, but a failure? too bad we don't have access to what happens in the background to have a clearer idea of what they mean.

Given the absolutely insane success of the PS2 I can actually understand why they were expecting more. The early years of this gen allegedly cost them a lot of money.

I don't know how much and, from what I know, they did make a profit eventually. I just feel that maybe the shareholders were pretty damn unhappy with that "eventually."

The PS3, did just as bad as any other regular console does at launch.

However, the parts that were made to build it, and the sheer amount of money they invested in it- when the PS3 struggled in it's initial years, it nearly sunk the company.

With a grand total loss of $5 billion dollars, they had to resort to selling both of their US headquarters just to make a dent in that deficit.

To consumers, it was a pretty great console.

By a business standpoint however, that console was a wildfire that nearly destroyed all of their savings.

Yeah, the PS4 better do very well when it comes out. Because while it may do as expected on release which may or may not do bad at all, the rest of the Sony company are more than likely non too happy with their entertainment sector at all the money they blew, and want to see some nice, solid, black numbers.

xqxm:
What Microsoft shill wrote this article? How is a console better in every single aspect "much more moderate"? Is it simply because it refrains from introducing features that suck so hard for the customer that the features have to be removed before the console is even launched?

Jesus Christ, Escapist. If you're strapped for cash, there's a lot of things you can do to earn some other than accepting M$ bribes, and they may even allow you to keep your journalistic integrity.

Where was something like that stated in the article?

I don't think you understand how horrible the initial years of the PS3 was to Sony. $5 billion dollars in loss is nothing to laugh at. Having to sell both US headquarters is nothing to smirk about.

There was a time where people honestly believed that Sony would crash because of how much money got wiped by the poor initial sales of the PS3.

Sony, like Microsoft, are not just a pure videogame company. They have a movie, television, music, and (diminishing) hardware sector. For all intents and purposes their entertainment sector put a huge blow on the company with the ridiculous amount of money they spent on the PS3. Sony's entertainment department are under immense pressure from the rest of the company to greatly ammend what happened with the first few years of the PS3. If they don't see solid blacks, then Sony's entertainment division better have a good excuse for that.

Microsoft has been posting losses on the Xbox line since inception.
It wouldn't surprise me if the Xbox One fails (and it honestly seems someone in there is setting the thing up to fail.) Microsoft will pull the plug on their gaming division and call it a day.
There was even an article on here stating such.
There are no corporate shills here on the Escapist.
Not only that, they simply got this article from another source. ala the bottom of the article.

I would be more inclined to believe they were paid if they were the first and only ones to post news like this.

CriticKitten:

Toadfish1:
Ignoring the fact that Nintendo would be in the exact same situation if the Wii hadn't, by complete fluke, become a massive fad, by what metric did Microsoft lose the 7th gen? They sold 80 million consoles and 819 million games, and have one of the most successful accessories in gaming history.

You didn't read what I said, did you?

Let's try again, this time with critical emphasis on the part you missed:

This is why people who say "Nintendo needs to die so that only Sony and MS are around!" are morons. Because it was inevitable that if Sony and MS performed poorly for extended periods (or at least, "poorly" in the eyes of shareholders) that they'd consider cutting out of the console market altogether.

The actual success of the console is irrelevant. MS and Sony are run by their shareholders, and what we see as success is not what the shareholders see as success. It's as simple as that.

Microsoft didn't end up in first place in either of their previous iterations. They're very much used to dominating every market they enter into, so being beaten by their competitors twice in a row will create a negative perception in the eyes of shareholders, who already don't see the value in their involvement in consoles to begin with. That combined with pressure in their primary market from other competitors (Mac and the like) will lead to people wanting them to push off the entertainment branch (which is losing them money) and focus on their core products. Sony's in the same boat, losing ground in consumer electronics to Samsung and other competition.

Actual success doesn't matter. What matters to Sony and MS are the opinions of the company's shareholders.

Nintendo, by comparison, is a company fully invested in video games. They'll keep making gaming consoles until they fall over and die. Whereas for Sony and MS, it's simply a matter of one bad board room meeting. This is something that so few gamers seem to understand, but they need to understand it, because it's the corporate reality we face. If this gen goes poorly (and all indications suggest that it probably will), we're very likely looking at the next big crash, and we'll probably lose one or more consoles in the process. Maybe even all of them. Nintendo is in the best shape because of the Wii and 3DS, but there's no guarantee they'll survive, either. They're just the most likely to survive of the "Big Three" right now.

And can we stop pretending the Wii was successful because of a "fluke"? It was brilliant marketing that got the Wii its massive sales lead. To suggest that it was a "fluke" implies that the person making said suggestion is extremely arrogant with regards to what "real" gaming is. >_>

"Winning" or "losing" might matter to Microsofts shareholders if they happen to be made up exclusively of Ricky Bobby from Taladega Nights. However, investors care about profit, and only care about who is winning to the extent that it gives them profit. The Xbox brand gives Microsoft a billion dollars annually, and has since 2007, so I think they're pretty satisfied with it. Who the hell is gonna look at a profit of a billion dollars from a division, then just say "we didn't outsell the other consoles. THIS MONEY SMELLS LIKE FAILURE!".

A division will be kept open as long as it is profitable. The XBox has been very, very profitable. The Ps4 will likely be very, very profitable. And when Nintendo isn't profitable, they will be shut down by bankruptcy. Investors don't give a shit about the console wars, they care about profit.

Toadfish1:

CriticKitten:

Toadfish1:
Ignoring the fact that Nintendo would be in the exact same situation if the Wii hadn't, by complete fluke, become a massive fad, by what metric did Microsoft lose the 7th gen? They sold 80 million consoles and 819 million games, and have one of the most successful accessories in gaming history.

You didn't read what I said, did you?

Let's try again, this time with critical emphasis on the part you missed:

This is why people who say "Nintendo needs to die so that only Sony and MS are around!" are morons. Because it was inevitable that if Sony and MS performed poorly for extended periods (or at least, "poorly" in the eyes of shareholders) that they'd consider cutting out of the console market altogether.

The actual success of the console is irrelevant. MS and Sony are run by their shareholders, and what we see as success is not what the shareholders see as success. It's as simple as that.

Microsoft didn't end up in first place in either of their previous iterations. They're very much used to dominating every market they enter into, so being beaten by their competitors twice in a row will create a negative perception in the eyes of shareholders, who already don't see the value in their involvement in consoles to begin with. That combined with pressure in their primary market from other competitors (Mac and the like) will lead to people wanting them to push off the entertainment branch (which is losing them money) and focus on their core products. Sony's in the same boat, losing ground in consumer electronics to Samsung and other competition.

Actual success doesn't matter. What matters to Sony and MS are the opinions of the company's shareholders.

Nintendo, by comparison, is a company fully invested in video games. They'll keep making gaming consoles until they fall over and die. Whereas for Sony and MS, it's simply a matter of one bad board room meeting. This is something that so few gamers seem to understand, but they need to understand it, because it's the corporate reality we face. If this gen goes poorly (and all indications suggest that it probably will), we're very likely looking at the next big crash, and we'll probably lose one or more consoles in the process. Maybe even all of them. Nintendo is in the best shape because of the Wii and 3DS, but there's no guarantee they'll survive, either. They're just the most likely to survive of the "Big Three" right now.

And can we stop pretending the Wii was successful because of a "fluke"? It was brilliant marketing that got the Wii its massive sales lead. To suggest that it was a "fluke" implies that the person making said suggestion is extremely arrogant with regards to what "real" gaming is. >_>

"Winning" or "losing" might matter to Microsofts shareholders if they happen to be made up exclusively of Ricky Bobby from Taladega Nights. However, investors care about profit, and only care about who is winning to the extent that it gives them profit. The Xbox brand gives Microsoft a billion dollars annually, and has since 2007, so I think they're pretty satisfied with it. Who the hell is gonna look at a profit of a billion dollars from a division, then just say "we didn't outsell the other consoles. THIS MONEY SMELLS LIKE FAILURE!".

A division will be kept open as long as it is profitable. The XBox has been very, very profitable. The Ps4 will likely be very, very profitable. And when Nintendo isn't profitable, they will be shut down by bankruptcy. Investors don't give a shit about the console wars, they care about profit.

One billion dollar profit means nothing to Microsoft, when they have lost 3 billion dollars on the Xbox division since it's inception. Honestly, investors of the Xbox were never really interested in the console to begin with, and are now looking to the Xbox One as an excuse to finally shut down what they see as a tumor on the company that hasn't gotten to the lethal stage yet.

Toadfish1:
"Winning" or "losing" might matter to Microsofts shareholders if they happen to be made up exclusively of Ricky Bobby from Taladega Nights. However, investors care about profit, and only care about who is winning to the extent that it gives them profit. The Xbox brand gives Microsoft a billion dollars annually, and has since 2007, so I think they're pretty satisfied with it. Who the hell is gonna look at a profit of a billion dollars from a division, then just say "we didn't outsell the other consoles. THIS MONEY SMELLS LIKE FAILURE!".

A division will be kept open as long as it is profitable. The XBox has been very, very profitable. The Ps4 will likely be very, very profitable. And when Nintendo isn't profitable, they will be shut down by bankruptcy. Investors don't give a shit about the console wars, they care about profit.

I'm not sure you understand businesses. They cut profitable divisions all the time. It's about opportunity cost. From their perspective that much money should be making them a larger profit if directed elsewhere, so they pull support of that division to focus somewhere they wouldn't be able to as long as those resources are tied up with, in this case, the Xbox. Just being profitable isn't enough to investors. You have be optimally profitable.

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