MojoKid writes: "Console sales (hardware and software) have tumbled for the second year in a row, even as game purchases from tablets and smartphones have soared. These factors would be troubling in any context, but the economics of new console launches are particularly brutal. Sony and Microsoft historically take a bath on console launches and hope to make up the difference in software sales. If we start counting in 2005, Microsoft's last quarter of results finally brought the company into the black in terms of total costs and losses for the Entertainment division and we can safely assume that Sony is much deeper in the red than Microsoft over the lifetime of the PS3. Few people would argue that Angry Birds is a replacement for Mass Effect 3, but mobile games are typically $2-$5 compared to $60 or more for premium titles. The question isn't whether or not hardcore gamers will buy new platforms — they absolutely will — but whether occasional gamers or media enthusiasts will opt to invest in a next-generation device when cheaper products offer increasingly sophisticated entertainment and media capabilities."