Well today Sony revealed its 2011 FY report and it was not pretty. Over $5 billion loss, 1.2 billion from SCE. Why is SCE losing so much, could be PS4 R&D, horrible sales, who knows what. Natural disasters have caused loss as well. Kaz says he has a plan to make Sony profitable in 5 years, good luck Kaz.  One article stated

And Sony is a lot closer to living on cash fumes than you might imagine. The company hasn't made an annual profit since George W. Bush was President. It no longer even has operating margins.

Yikes. Sony released all sorts of numbers including LTD PS3 sales, 64 mil. PS2 is at 155 mil. PSP at  76 mil. They have revealed that 1.3 mil Vitas have sold so far, that is it??? They expect to sell 10 million this upcoming year, HOW? The problem with Sony is that they are no longer the standard in any electronics. Growing up my dad only bought Sony cause they were the best in the market, now Samsung has totally taken over in almost all the areas Sony lead in.

Here is Sony's stock from our market.

This is not uncommon. Check out other big game companies stocks

Clearly 2008 was the height of this industry. All game companies stocks were booming, sales were record breaking and it was around that time when we were hearing how the game industry was becoming bigger than the music industry.  Since then its been a slow decline down to this point which is the worst sales we have seen in a long time. Some companies are suffering more than others with small devs closing left and right.

2008 was 2-3 years into the current gen, which is the sweet spot, the gens prime so to speak. Normally that would mark the halfway point of a generation but this time the console makers wanted to extend the life of the normal 5 year cycle. Now look what happend! We are a year or two over the normal cycle and the results are disasterous.  People want NEW SHINY THINGS. Why is Apple so huge right now cause they have brain washed the masses into making them believe they need their new product to stay current, to stay in the loop. Apple gives its consumers a new product every year to keep them wanting more.

The game industry has done the opposite, clingling to these dinosaur consoles (in game years) trying to tell people you still want this product 6 years after it has come out. They do so with new add-ons and stupid experiments like wonderbook. No one but us gamers are paying attention anymore, the casuals have moved on to the next new shiny thing. Game sales are on a decline but you still see the big games do well, that is us, the gamer. We still buy games at about the same rate as always. You would think that 6 years in the install base is so huge that games would sell better, no, they sell what they normally sell cause us gamers are pretty constant. The casuals have gone and game sales have suffered. Those huge surprise hits are now few and far between and most games are not doing as well as they did earlier in the gen, maybe cause of fatigue or lack of excitement.

Can we stay in one gen for 7 years or more, yes I believe we could cause the games are still great, honestly I am still satisfied with new offerings on PS3/360. They question should have been SHOULD this industry stay in one gen for 7 years and that is a big NO. Even if the games are still wowing us this industry needs NEW products just to keep excitment and the general public interested. 5 years was fine and now they messed it up and are suffering cause of it.

"Why is SCE losing so much, could be PS4 R&D"

Unlikely given the news I have posted over the past couple of years, for instance the one above about no PS3 level investment. Sony is ditching proprietry hardware and going with the usual U.S computer CPU and GPU producers, they set a target and price and let the other companies get on with building it.

"They have revealed that 1.3 mil Vitas have sold so far, that is it??? They expect to sell 10 million this upcoming year, HOW?"

They lumped projected Vita sales in with projected PSP sales to make it look better.

"Can we stay in one gen for 7 years or more, yes I believe we could cause the games are still great, honestly I am still satisfied with new offerings on PS3/360. They question should have been SHOULD this industry stay in one gen for 7 years and that is a big NO. Even if the games are still wowing us this industry needs NEW products just to keep excitment and the general public interested. 5 years was fine and now they messed it up and are suffering cause of it."

I agree, you need new things, new tech, new shiny things to excite people and stimulate the market. People are acting like Nintendo is jumping the gun early with Wii U when it's coming 6 years after Wii launched. By the end of this year PS3 will be 6 years old, 360 will be 7 years old, by the time Nextbox launches late 2013 that will be 8 years old.

The 5 year lifecycle works, what you saw this gen was MS and Sony made huge investments in powerful machines and wanted extra time to claw the most money out of it. Nintendo made a cheaper machine, sales exploded then tailed off, hence time for a new system. With MS, Kinect gave them wind in their sails but the common gamer does not want Kinect or its games.

Also, should we be more worried about all these devs leaving big companies to work on smaller or social games? Are the rising budgets and pressure too much for solid working conditions? Does it encourage homegenised gameplay? What about Crytek and their Free to Play? EA are now saying gaming is going free to play.

Today there is another social dev saying consoles are going the way of the Dodo. Can we keep up with platform specific consoles or are we looking at a more fragmented gaming future? More platforms, tablets, PCs, phones, mobiles, streaming PC etc.

Can AAA survive in the long term? I mean lets say graphics keep improving as they have done to a point of photo reality and the budgets rival or exceed Hollywood blockbuster movies. 20 years from now, if the risk of failure is that high. Will we see more independent movies (I mean games) and less summer blockbusters?

If we were gaming journalists wouldn't we be blaming iPad and smartphones for the industry decline right now?

iPad and smartphones only matter to the casual market...which is why Nintendo is trying to cater to the hardcore again with their new console...because they're the most affected by them as they had such a large casual audience.

Serious gamers will always play on consoles and PC. Who the fuck wants to play on a phone?

Yes. The extended cycle combined with the US/EU financial crisis starting in 2008 is to blame (this is kind of circular, because the financial crisis is to blame for the extended cycle).  

I am not sure if you guys remember but back in early 2008 everyone was talking about how shortened hardware cycles were going to be the new reality.  I specifically recall this as I was telling people that once the financial crisis hit all that talk would go out the window -- yes, I was one of the people who saw the crash coming.

Video gaming is a luxurious hobby, when times are tough people cut out the non-essentials.