Kill PS3
The PS2 is the best-selling console of all-time, and is still selling briskly. It's also a slap in the face to the PS3. Sony's new gaming device is a thing of beauty, yet the pricey hardware that banked on rapid adoption of the Blu-ray disc format is off to a slow start.
Even with a limited number of units available during its launch, the systems were being swapped for meager markups on auction sites over the holiday season. You don't have to jump through hoops to get a PS3 these days, yet shoppers still aren't flocking.
Sony can't admit its mistake and scrap the PS3. It has no problem selling plenty of PS2s until the market does come around. However, Sony will soon discover that it's not easy being in the pack. As the undisputed leader, software publishers often earmarked titles exclusively for the PS2. It's where the money was. Now the dynamics have changed. Companies like Electronic Arts (Nasdaq: ERTS) and Activision (Nasdaq: ATVI), which were pretty good about spreading the wealth, will continue supporting all three systems.
In the meantime, platform-specific titles -- like Halo for the Xbox and the Super Mario, Donkey Kong, and Zelda Nintendo franchises -- will stand out even more as ambassadors for their consoles. And that equals more bad news for Sony.
Sony will be pressured. It's already being pressured financially. Because of its embattled state, the company may be hesitant to commit to price cuts to help grow the PS3's base at the expense of near-term profits.
Oh, you've got to love the video game wars. Sometimes they're even more exciting than the video games themselves.