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Sony Or Microsoft to Bow Out of Next-Gen Console Race, Predicts Gaikai

Sony was quick to shoot down rumors that a PS4 would be announced at this year's E3, but things just got a lot more interesting all of a sudden, as cloud gaming service Gaikai has commented that one of the current console manufacturers actually won't be creating another console for the next generation. Speaking during CES, Nanea Reeves, chief product officer for Gaikai, predicted, "Not all of the current console makers will have one more generation. That will be the big news at E3."

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donniebaseball2109d ago

Holy crap. I wonder if Gaikai knows something or if they're just blowing smoke up our butts.

Criminal2109d ago

I highly doubt that they know something. It's just a prediction that won't happen. Maybe after PS4 and 720, one of the companies will call it quits.

darthv722109d ago

MS knows how to develope a good ui and community service. Sony has the hardware skills. If they were to collaborate, they could create one hell of a system together.

then again, if Sony chooses to stay the course and MS bowed out I'd like Sega to step back in. Maybe with the help of MS and their software backing it really could be a dreamcast 2 (funny how that sounds like: dream come true).

mcstorm2109d ago (Edited 2109d ago )

Darth i was just thinking the same with ms and sony teaming up. This would be amazing as the xbox services beat anything on the ps3 but the hardware on the ps3 is amazing.

But sega and ms teaming up as well would work as sega is a big name and would help ms get into the Chinese market but be strong enough to keep the usa.

But that said i dont see ms or sony pulling out there is too much money to lose by not bringing out another console and ms and sony are big names in the games industry. But lets wait until e3 and see what is said.

ABizzel12109d ago

Playbox or XStation would be highly welcomed by me.

Then I see AppTendo forming next...

himdeel2109d ago (Edited 2109d ago )

I imagine we'll eventually see consoles that are closer in specs to more current mid range gaming PCs of the time. Eventually consoles will have upgradeable hardware.

However this wont happen in the next 5-10 years but if there are actually still consoles in 10+ years they will be handheld devices like the PS Vita that you can hook up to a TV. Having giant devices under your TV that are sedentary is a thing of the past.

BattleAxe2109d ago (Edited 2109d ago )

I think it would be MS because if you look at what they're doing with Windows 8 by including XBOX LIVE, it looks like they're getting ready to make the PC their primary platform. Many people use PCs in the livingroom these days, so it is conceivable that we could see XBOX branded PCs. Its much easier to produce a PC than it is to produce a console, and this way Microsoft doesn't have the burden of having to produce hardware anymore. They could get DELL, ACER or HP to make PCs with the XBOX name on it.
http://us.acer.com/ac/en/US...

On the other side of things, I think Sony will have to continue to make a Console to stay relevant in the gaming market. Sure, they make the VAIO, but Sony using PCs to deliver their services wouldn't work nearly as well as it would for Microsoft with their massive brand recognition with the PC. So even though I think MS would be out of the console race, I think they would still be a big force in gaming.

+ Show (2) more repliesLast reply 2109d ago
GraveLord2109d ago

Gaikai is irrelevant. They're saying shit to get publicity.

vuzuki2109d ago

They are trolling for PR

Information Minister2109d ago

If Gaikai says so, then it must be true. It's not like they have a stake in it... I mean, how could they possibly benefit from the loss of one competitor? /s

NYC_Gamer2109d ago

really doubt one of the big 3 will drop out the console market.

donniebaseball2109d ago

While I doubt it, I wouldn't rule it out entirely, especially for Sony. Look at what the PS3 launch did to Sony's financials for years. It's a HUGE investment to launch yet another more powerful console. Sony's TVs aren't selling either.

BitbyDeath2109d ago

Sony already have devs working on games for the PS4 and just recently talked about having a 10 year life span for the PS4 so it is not them

DragonKnight2109d ago

@donniebaseball: MS' first venture into the console market, the original Xbox, cost them 4 billion in losses at the END of its life cycle. Meaning they made no profit off it last gen. This gen, they spent another 3 billion on RROD warranties for a total of 7 billion lost since they entered the industry. And yet they are still around. I highly doubt Sony would bow out with less losses and having been dominant for 2 generations prior.

_Aarix_2109d ago

@Bitdydeath

Do you work at sony or something? How do you know that? Everything involving next genration is all rumors. That 10 years mean how long sony will support their console so in 2016 theyll drop support

MariaHelFutura2109d ago (Edited 2109d ago )

I guess all the "doomed" articals got to your brain donniebaseball.

-They just released the PSVita
-The PS2 sold over 153 million and counting.
-The PS3 is selling great WW.
-PS4 is in the creation process.
-They have bought 3-4 studios this gen.

gamingdroid2109d ago (Edited 2109d ago )

@DragonKnight

That is in the past, this is now. MS is doing excellent with record sales and profits. Their business model is sound and healthy.

Spinning off the Xbox 360 business it would be worth far more than measly $7 billion loss that is considered an investment. Heck, MS tried to buy Nintendo for $25 billion back in 1999' and I would be hard pressed not to believe the Xbox business isn't worth at least that now.

Contrast with Sony, whom is facing financial issues. What is worth more to Sony, console business or the rest of their electronics business?

To top it off, apparently Sony has lost more money on PS3 than it made on PS2 ...and this was back in 2008!

http://www.1up.com/news/son...

Sony didn't reach break even on PS3 until 2010.

With 4-years of straight losses for the company overall, if you don't have a choice, you don't have a choice, but to make the cuts.

That said, I think Sony would just raise money by diluting their stock or get another investor to front the cash if they ever needed more cash. However, Sony is still spending (recently bought Ericsson) so they aren't in any dire situation yet.

ZombieAssassin2109d ago

I don't see Sony stepping out mainly because the PS brand is what use to make them a majority of their money and they'll prolly wanna try that again by releasing a console that they don't loose $200+ on each unit sold.

The guy from Gaikai is just blowing smoke I doubt he knows anything.

moparful992109d ago

@gamingdroid.. DO you ever give up? Microsoft had they're stock downgraded a year ago due to the bleeding taking place in their entertainment division which covers xbox, live, and cell phone divisions.. Yes they are selling alot of consoles but you are discounting the fact that they spend millions upon millions on marketing, buying up dlc exclusivity, the huge investment that kinect took, the rrod warranty fiasco, redesigning the xbox to eliminate the rrod etc.. Microsoft hasn't even begun to recoup all of those losses.. Sony on the other hand has the advantage of not hemmoraging money for their mistakes, the ps2 alone made the playstation division of sony the most profitable division they currently own. Now the ps3, first party exclusives catalog, and ps plus subsciptions are profit for them.. Know your facts before you speak...

BitbyDeath2109d ago

@_Aarix_, announcing something like that on a site like this would be suicide.

kreate2109d ago

@gamingdroid

dude.. The article is from 2008. Right now is 2012?

MrBeatdown2109d ago

"While I doubt it, I wouldn't rule it out entirely, especially for Sony. Look at what the PS3 launch did to Sony's financials for years. It's a HUGE investment to launch yet another more powerful console. Sony's TVs aren't selling either."

And Sony launched the PS3 with Blu-Ray which drove the cost up significantly. Weren't they selling PS3s at launch for a $100-$200 loss? It would be absolutely stupid for Sony to drop out now, now that they have a format which will be viable for games for several years. Sony took a hit on PS3, but it's a hit that had long term benefits that go well beyond PS3.

The PS4 really only needs to be a more powerful PS3. There are no massive, costly changes that would require Sony to take a massive loss upfront. Assuming Sony can achieve the same level of success as they have with the PS4, which should be a relatively easy task considering how Sony really shot themselves in the foot with the slim first year line-up and price, the PS4 will be far more profitable for Sony than the PS3 was.

+ Show (7) more repliesLast reply 2109d ago
GameTavern2109d ago

@DragonKnight
I think the difference is that MS was spending a ton of money to break into the industry. They've really kind of evened out in recent year (not saying they've recouped all that they've invested)

Where as Sony has been a force in the industry, as you mentioned for 2 gens, and really have fallen on hard times. And its not just the gaming division. They can't continue to bleed money.

Though not saying ANY of the 3 are going to bow out.

gamingdroid2109d ago

It's a prediction:

"Speaking during CES, Nanea Reeves, chief product officer for Gaikai, ***predicted***, "Not all of the current console makers will have one more generation. That will be the big news at E3."

*** emphasis mine

For fun though, consider this:

a) MS just released Kinect and heavily invested into both Xbox and Kinect brand. At this point is very much profitable with a record sales year.

b) Sony had slow growth in the PS3, but are making strides in profitability (note, assumption). They just released PS Vita.

With financial constraints, it does seem Sony is the most likely target. However, if they were to pull out, it doesn't seem Sony would invest in the handheld market either.

So, I think Gakai is just trying to drum up attention to their service.

moparful992109d ago

Umm are you forgetting the 3 billion dollar bill for the RROD warranty extension? What about the 500 million that microsoft spent in marketing alone last year, the huge investment that kinect took, all of the dlc exclusivity they are blowing money on? As I posted above its funny how everyone is forgetting that just a year ago microsoft had its stock downgraded due to the financial hemmoraging that was taking place in their entertainment division... But you're right sony is the most financially unfit for the next generation, SMH...

jetlian2109d ago

no one forgot moparful!!! 500 million wasnt spent all at once. And kinect with 18 million sold generated over 2 billion already and thats without game sells!!

Kinect was making profit from jump. difference between MS and Sony is MS has other divisions to fall on while sony does not

gamingdroid2109d ago (Edited 2109d ago )

@moparful99

Despite whatever rumored marketing costs, MS is posting a profit. Their investment is paying off. The amount of money they put in is paid by in company value. They now have a secondary market to tap for their humongous growth in the Xbox 360 business.

Kinect is selling like hotcakes and games are flying off the shelf. From where I'm standing it seems Kinect is by far their best investment as a business.

RROD, sure it was a mistake, but that was then, this is now 3-years later.

As it stands, MS is cash rich, their business is profitable, they had huge growth and the business overall is booming. They didn't even have to go as far as having an official price cut to reach their goal.

Sony as a company is in distress with 4-years straight of losses, their PS3 venture has cost them far more than any profit they made from the PS2. They recently cut the price on PS3 to boot and the console is again sold at barely a profit, their cash reserves are dwindling and you tell me?

Who is in worse shape?

It's not about who spent the most money... That's inconsequential, it's about who can afford and willing to make another bet.

I'm pretty sure with MS recent investment, now more than ever is their business the most stable it has ever been with plenty of confidence (maybe even too much).

Take a look at Sony's stock (SNE), it is on almost a 15-year low and reverted back to what it was in 1995, which means they are worth less due to inflation.

Look at MS (MSFT) stock price, it is essentially stangant in the last 10-years, with a dip in 2009, but certainly far above what it was in 1995.

MrBeatdown2109d ago

"a) MS just released Kinect and heavily invested into both Xbox and Kinect brand. At this point is very much profitable with a record sales year.

b) Sony had slow growth in the PS3, but are making strides in profitability (note, assumption). They just released PS Vita"

This points both ways.

MS is doing better now than ever, in big part due to the casual market. Isn't that incentive to move towards a Wii-like model of cheaper, more affordable hardware? With the 360 already very similar to Wii U in terms of power, it would make sense to stick with 360 and focus on continued support for the system that's making them boatloads of cash. Nintendo took first place this generation with a similar strategy.

Sony on the other hand, didn't do well with the PS3, but the reasons why are obvious... Selling at a significant loss and a launch price that was nearly double that their competitors. With no need for hardware that drives up cost in the way Blu-Ray did, and a track record that includes two incredibly successful consoles, and one that still did very well despite glaring issues, why wouldn't Sony want to take another shot at a console?

gamingdroid2108d ago (Edited 2108d ago )

@MrBeatdown

Frankly, I don't see why anyone of the big three would back out either. So I very much agree with you.

The only reason I'm pinpointing Sony is because of their weak financials, 4-straight year of losses and the major losses in PS3. They all kind of come together now.

So if there had to be anyone who would drop out, I would bet Sony. However, I don't think that is likely AT ALL.

moparful992108d ago (Edited 2108d ago )

This article was from february of 2011

http://www.joystiq.com/2011...

This article clearly shows that the playstation brand is doing very well for sony.. They are losing in alot of their other divisions.. I know you like to look at that 4 year decline for sony as a whole and proclaim the death of playstation but thats nowhere near the truth.. Why would a company that is struggling financially pull out of the market that is making them the most money? Thats financial suicide.. Do they spend alot in research, development, and marketing? Well yea, but those investments are the only way to stay relevant in this industry.. I know its easy to discount sony considering everyone one else in the media does but sony is a gaming icon and they wont go out like this...

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ksense2109d ago

hey gamingdroid please explain why Sony bought sucker punch recently if they had no plans of doing another generation. does it matter if they had gone multiplatform this late in the lifecycle? no so sony was just making sure they have all these studios pumping out games exclusively for sony next generation and hence they are buying studios and closing ones not making them money. with microsoft leaning more and more towards the larger casual fanbase and if anything i have a feeling MS might bow out because i don't think they want to make huge investments like they did with xbox 360 to get ahead of sony and capture the gaming market.

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arnyftw2109d ago

Is this a joke? If they dont make a new console then that means they're just quitting from the video game market. Microsoft's spent too much time and money on live to do that, and Sony's been in the video game business for ages.I dont think either of them is stupid enough to think they can extend their life span even more.

lorianguy2109d ago

Will they be allowed to? I'm sure at least SOME governments will interevene if a monopoly situation takes hold and becomes out-of-control.

Majin-vegeta2109d ago

Mehh i don't see Sony going anywhere.

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