Sony Cannibalizes Itself

I've made it no secret that I think Sony does some incredibly stupid things (read my previous rants here and here and even here). Ragging on Sony is something I love, because I can't think of a bigger company that has, in the name of the almighty dollar, done so many things that end up costing it money.

But it's been a while since I've been able to rip on Sony. They were victorious in their format war with HD-DVD (a first for Sony) and they finally managed to pull into second place in the console wars, a miracle, considering the PS3 is priced $100 more than the Xbox 360.

In April, Sony lowered the price of the PS2 to $99. Sony has been extremely loyal to the PS2, still continuing to put out a full roster of games for the console that has made them hundreds of millions of dollars. But, a price drop is to be expected, as the system is nearing the end of its life cycle, and the price drop usually signals the beginning of the end for a console. But maybe they'll reconsider, as reports are coming out that the PS3 has dropped to fourth in console sales behind the Wii, the Xbox 360, and (wait for it)...the PS2.

Yes, by dropping the price of the PS2, Sony has managed to cannibalize sales of the PS3 from itself. They are barely able to turn a profit on the PS3, and they lose sales on it by discounting their last-generation system. It just goes to show you that, regardless of how many bells and whistles it buys you, $300 is $300.

I suspect that legendary Sony founder Akio Morita, who turned Sony into the media giant it is today, is spinning in his grave right now.