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PS3 pushing SCE $1.71 billion into red

Sony CEO tells press conference that the game division's fiscal-year losses will be double previous estimates.

434 Comments

Last week, Microsoft announced its financial results for the quarter ending September 30, 2006. As usual, its game division lost money--a lot of money. For the July-September quarter, the company's Entertainment and Devices division, which makes the Xbox 360, lost $96 million--an improvement over the $173 million the company lost during the same quarter in 2005.

Today, one of Microsoft's rivals in the game arena announced that it too would take a loss on its own game division. Speaking at a press conference in Tokyo, Sony CEO Sir Howard Stringer announced that losses at Sony Computer Entertainment are expected to now total 200 billion yen--or around $1.71 billion--for the fiscal year ending March 31, 2007. The figure is nearly twice the shortfall Sony originally projected.

"Considering some of the additional costs of PlayStation 3, we have to generate some excitement and profits from elsewhere in the company to offset the performance of PlayStation 3," Stringer told the Reuters news service.

One reason cited for the increased costs is Sony's decision to drop the price of the lower-end PS3 model in Japan. At last month's Tokyo Game Show, the company announced it would lower the price of the 20GB version of the next-gen console from 60,000 yen (about $515) to 49,980 yen (about $429).

Despite the increased cost, Stringer expressed confidence that the PS3 will be a success. "The point really is that PlayStation 3 is already finished and has been tested in America and has been deemed a creative success," he said. "In the end that is what counts."

The executive also expressed apparent befuddlement about some gamers' anger that the PS3 launch was pushed back to March 2007 in Europe. "I think the idea of worrying about a delay in PlayStation is slightly strange to me," said Stringer. "Every complex technology runs the risk of delays."

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Phazevariance

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Regardless of how much SONY sucks, and how much they abuse their fans, and how little intereste I have for buying a PS3, their system will still sell, because there are kids out there who gre up with Sony as their only systems, where as the older crownd had Nintendo and the even older crownd had Atari... fans will buy the system they love. It will sell, and I will still dislike Sony.

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CidStormwind

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hmmm sega anyone?

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diablos101

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We just know next time to be more sceptical when sony releases the playstation 4, we'll look back at this (3) launch and go through one ear and out the other. Stringer should realise the promices that his company has made related to delay topics. "without fail, playstation 3 would be released in spring 2006" so as loyal sony customers (or whatever) we believe them and wait, and wait, and after each broken promise, i think we have the right to be sceptical. Then Stringer the cheek to say "I think the idea of worrying about a delay in Playstation is slightly strange to me".. its all a bit wrong really

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Bam_Butch

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Is this article and fanboys' c0mments supposed to make me not want a PS3 because I'll be getting one. And Sony is right , in the end is what counts. They're obviously not worried so neither am I

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kyosukeugc

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BlackDragon110 , wher ei can say that other games might jump ship from Sony, Square won't take the numbered Final Fnatasy series anywhere else but Sony. Square-Enix has to have the most sophisticated graphics game everytime they release a new one in the series. That's their downfall and arroagance. I love their games to death, but they don't seem to understand that we love their games fo the stories/gameplay more than the graphics.... It's whyy FFVI is still one of the most popular ones to date.

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KronikKilla

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Sociologist, I find it funny that you should mention politics being a more important factor in someone's life. The same corporations that want you to be loyal to their product also want you to be loyal to their canidate. In fact, that is where people learn to pick sides, is in politics and sports. With constant bombardment from the media about politics and sports, people have learned to transfer this embedded extremeist loyalism to all aspects of life. And just like video game systems, politicans will make no significant impact on your life. And just like when their selling a video game system, those corporations could give two sh1ts about you when selling their canidate, and telling that elected offical how to vote once in office.

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THE_PREZIDENT

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I dont care, Im buying a PS3 and selling it for double the price. I'll settle for a PS3, once this stupid Disc format war is over and the price for the PS3 drops to 300 USD.

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BlackDragon110

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brucies_bubbles Final Fantasy, Suikoden 6, and Metal Gear Solid 4 are third-party games so there is no guarantee that they will remain Sony exlcusives for long.

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brucies_bubbles

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Sony shouldn't make comments about Europe like where a bunch of winers. Don't promise what you can't fulfill then maybe we won't complain They should be making apologise instead of excuses. Unfortunately i'm stuck with the PS3 if i want to play Final Fantasy, Suikoden 6, and Metal Gear Solid 4

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tajwar101

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BlackDragon110 Yeah Sony messed up the launch units for Japan. Apparantley there is a shortage of components so they decided to cut the amount of units going to Japan from 100,000 to 80,000. But don't worry they got Japan's back....by basically selling them "I OWE U" tickets worth the price of the PS3, which would be redeemable at certain stores. Since that kind of bull won't work here in North America if people can't get a PS3 for the holidays, Sony decides to please the die-hard Sony fans by selling their new silver-edition PS2....its the same PS2, only Silver.....man, they got the Sony fanboys all figured out, huh?

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Sociologist

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"I think the idea of worrying about a delay in PlayStation is slightly strange to me," said Stringer. Wow, this is probably the worst PR statement of the year, particularly if you are European. Stringer and Sony are going to receive a cold shower when the next fiscal quarter arrives. On a side note, the entire fanboy, flamewar over consoles has been quite entertaining to watch, and it's analogous to fierce community loyalty to a particular sports team. When do some people have such a devoted interest/stake in the success or failure in a given console when, in reality, the corporations and developers who manufacture and develop said consoles could give two sh1tes about you, even if you are a devout defender of 'x' console. I have always found it fascinating to see 'gamers' (even though I object to the label of gamer being indicative of a certain lifestyle) cutting each other down with insults due to a material object that will not really have any impact on their life down the road. Games are supposed to be fun, and are not supposed to instill a sense of fierce loyalty in the end user, as that is exactly what mega-corporations want. I'm not saying that I'm more enlightened that anybody else or anything along those lines; it is just particularly sickening and disheartening to watch some of you here thrash each other over a stupid video game console when there are bigger things at stake in your lives, (e.g. politics, education, family, etc.). In closing, take care of yourselves... and each other ;-) /end soapbox

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zicky

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kavadias1981 tell me about it!!!

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deactivated-57fce817a4cf5

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Most of you are just arguing amongst yourselves. Does anybody have an actual comment on this report?

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grayoldwolf

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"I think the idea of worrying about a delay in PlayStation is slightly strange to me," said Stringer. "Every complex technology runs the risk of delays." Really? You don't see how European gamers - people who have supported the PlayStation brand for 10+ years - would be a little upset to get the shaft yet again when it comes to getting a Sony product months after everybody else. And you can't blame technology either - the same console is being released in the US and Japan. This is purely a marketing decision, and basically it tells European gamers "Your custom doesn't matter to Sony". It's total BS. It wouldn't have killed them to sell 300,000 units in the US and allocated 100,000 to Europe, every unit is going to sell regardless of the region it is shipped to. Thanks again for the big FU, Mr. Stringer. European gamers salute you.

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vaejas

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"Every complex technology runs the risk of delays." And 1.7B-B-B-Billion in red ink, apparently. Sadly, the Europe delay means Stringer won't be able set up a PS3 in his London home, and stream TV BritComs to his PSP to watch while enjoying the winter launch in his Tokyo home. (Too bad he can't get one from Lik-Sang anymore. Boo-ya!)

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BlackDragon110

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I still have my Resident Evil 0, not the best one of the lot but they all can't be winners.

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Brokendemise

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Wow, not to be mean but if Sony keeps this up, they're screwed.

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Oni

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I'm pretty sure the PS3 will be a success. Will it have the same success that the PS2 enjoyed? I dunno. It's going to be an uphill battle that's for sure. Oh and I just want to comment on "I think the idea of worrying about a delay in PlayStation is slightly strange to me," - Yeah maybe, but not when your company keeps breaking your word. Don't forget Sony, you said the PS3 would be released world wide Spring 2006, without fail.

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BlackDragon110

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Wow you mean to tell me they can't even get out the 100,000 for Japan? So will that mean they will cut the shipment for North America? If you have a pre-order I think you should be a little concern right now. Looks like Sony won't make that "goal" of 2.4 million but the end of the year or that 6 million but March.

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zicky

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get a life......f that, get a ps3!!!

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snarple_basic

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Ahh yea those 49.99 rereleashes sold horribably, RE 4 came too late to sell GC's, they would have been better off developing for more then 1 system then discriminating against other systems. In the end RE 4 did good so its not that big of a deal but there was no reason to waste time with porting all of the old games to GC, most fans didn't just own N64 and no PS systems like Capcom was thinking. And besides the prices were waaaay over priced for those rereleashes. Oh and how many people went nuts over Resident Evil 0??

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zicky

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sony got you locked-brainwashed!!!!

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zicky

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ok we know that sony aint gona go out of biz fanbois so "STOP IT" we got 5 pages tellin us that. 3bilion aint even enough to f up sony. your pershuse ps3 gimick will sell n make profit so chill. 360 will be there even if they fall behind dont matter. il be glad to read how it will. hit me with the best you got you fanbois of a systems that aint even out yet ahahahaha

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Zanoh

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Ouch...I think Nintendo might win this nest gen after all.

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tajwar101

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"I think the idea of worrying about a delay in PlayStation is slightly strange to me," said Stringer. "Every complex technology runs the risk of delays." Hmm that is no surprise...considering how they actually cut shipments AGAIN....just go to ign...apparantley its now from 100,000 to 80,000 in Japan...their OWN home base...well good luck Sony.

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Kayrod29

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I think the Playstation 3 will fail, it will not profit Sony at all.

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cromwargod

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Skippyj9 To the people saying that Sony is suffering. They're not. This was expected from the beginning. The only way Sony can make money off the PS3 is off of peripherals and games. And that is Playstation's major selling point, always has been, so the PS3 should be fine. But then again we can't say anything for sure. Yes it is expected at the begining, but not a lose this big. I can guarantee you that Sony share holders never expected or were advised that the loss was gonna be that big. Now they have too sell double of everything forcasted to break even. Think about it and if it dont click, do the math.

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Phazevariance

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It's too bad Sony is doing this all or nothing bet, if they had shipped it with a regular DVD player, they woulndn't be in this situation. If Blu-Ray goes big time, Sony will reap royalties on EVERY disc sold anywhere. If it fails, it becomes a PS3 proprietary medium, and then they won't get their money back. Just imagine, if they imploded, that would only leave microsoft with no major competitors in the hardcore graphics side of things... everything will be either graphics or gameplay (nintendo) ... and Microsof tcould riase their prices to anyhting they wanted.

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eegeeg

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ONLY TIME WILL TELL WHO WINS THE CONSOLE WARS. SOUND LIKE NINTENDO MIGHT WIN THIS TIME AROUND

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aRcad33

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Sony's digging more holes then that guy in Dig Dug

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tonywilsn

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Why is that everyone says if ps3 isn't a success that sony would cease to exist . Sony made its big name with other electronical devices like the walkman . It might quit making games but the company simply going bankrupt over one item doesn't make much sense . Its a risky move that much is true but that all i agree with .

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hunter8man

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Ever since 2000, most game divisions lose money upon the release of a new system. Granted, Sony has had much more problems with this than they did PS2. I'm not too worried that the system's gonna crap out, and Sony will profit off the system in a few years. Let's not forget that any system with the name "Playstation" on it will sell based on name alone. Finally, they said that other divisions of Sony will have to perform well to offset this loss. Spider Man 3 the movie comes out next year, and it always rakes in big bucks for Sony. Add that to the eventual release of FFXIII, MGS4, and DMC4, Sony will be just fine in the long run. 20 days till PSWii!!!

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Me_Becoming_I

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This in no way says that Sony is going out of business. It just means that the PS3 is expensive to make, and they need to generate some sales threw other aspects of Sony to offshoot development costs of the PS3. Once the console launches, Sony will be making money. Not profit, but money will start coming back to them, and that is a good thing. I can't for my PS3. And don't bother saying that Sony will go under because of the PS3. They won't.

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allatyk

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gokunj2... stay on topic here. Talking about PS3 not PSP. Also not once in any of my posts on this topic did I say Sony will be number 1. My comment was they will do fine in their own country. Am I predicting number 1? No. But in no way will they be last or fail in japan. You don't need to be number 1 to be a success. Look at Nintendo, still going strong since the 80's. Haven't been number 1 since the 90's.

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SleazyD

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Wow, an almost 2 billion lost. And that's with the PS2 profits figured in. Geeze... I'm not sure they'll ever make that back. Microsoft has yet to be profitable at all since entering the game market, but they've never taken losses like that.

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Kolomo

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"What kind of name is Tor anyways? It sounds like Thor said with a speech impediment." Honestly, if that's the best insult you can come up with, don't even bother.

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SilV3RSix

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Paul_TheGreat "The PS3 will be an success." Apparently all they are shooting for is "creative success... "

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themyth01

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Well Sony is taking a risky move with the PS3, if it fails it will be the end of the PS platform and possibly Sony.

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gokunj2

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Truth.

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BlackDragon110

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snarple_basic I can't completely agree with you on the Resident Evil thing because the GC version is the best of the two and it's the one that wins the awards, not the PS2 version.

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gokunj2

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wait........I'm confused. Are you saying that RE jumping to ps is a big mistake?

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Kidou

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My Anti-Drug: Fanboys: Someone has to kill them.

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king-akt

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it happens all the time in the industry, so Sony will be fine

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KickinIt_ftw

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@hmsmichaelot: "Sony is doing it for the GAMERS. What kinda retard would hate them for that" Wait... are we talking about the same Sony here? Between telling gamers that the ungodly high PS3 price point was "too cheap" and that the PSP would take handheld gaming "out of the gaming ghetto," along with their failure to provide any support for EU until spring '07, and (of course) the decidedly anti-gamer Lik-Sang fiasco -- it would seem that Sony's theme for this generation of gaming consists mainly of making the PS3 as unpopular as possible by wiping it's ass on the gaming public and pounding their chests about how great they were the last time around. Sony is doing it for the MONEY. No one begrudges them for that. Name a console maker that isn't, right? The thing that enrages people is that Sony is doing it for the money AND doing it piss-poorly (to the tune of a $1.71 billion loss). Even better, they're doing it with gallingly unabashed arrogance (see: Sony refusing to settle with Immersion, Corp. resulting in the loss of $91million and the ability to use rumble on the PS3 [1], and Sony arguing that the PS2 was a PC to scam $63 million in rebates for import duties [2]). Sony priced themselves out of the mainstream market both with their handheld and their console. When you're that far in the red, a price drop isn't done out of benevolence, it's done to help pull your ass out of the fire. HDMI support on both versions of the PS3? Ditto. The fact is that Sony's only real strength was the formula of keeping the status quo on hardware, while ensuring that they retained the lion's share of licenses for killer apps like FF, MGS, GTA, etc. This time around - they bit off more than they could chew as far as hardware and the result is a grossly overpriced, cobbled together collection of bleeding edge hardware that has outpaced what the general public will need or want within the next 2-3 years (see: 1080p, Blu-Ray). Had they chosen to go a slightly more conservative route this time around, that $1.71 billion deficit would probably be much closer to MS's ~$100 - $175 million range. Likewise, without Blu-Ray and the heating issues that plagued the PS3 in early development, there wouldn't be a console shortage at launch. Sony has taken a 'sure thing' and fumbled it in a very, very costly manner. We'll see if they can manage to get the PS3 back on track, but I doubt it. [1] << LINK REMOVED >> [2] << LINK REMOVED >>

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zash

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I hope sony pulls through alright.

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_sean_05

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PS3 FTW because it is superior to 360 and isn't competing against nintendo.

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snarple_basic

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GTZ2k3 Just for the record Resident Evil jump ship to Nintendo just so they can releash every Resident Evil game to fans that they some how believed didn't already get to play these games. Well those rerreleashes didn't really sell that good and in the end RE 4 didn't sell as much as Capcom was hoping it would on the GC and next thing you notice they came back to PS and releashed RE4 on the PS2 which sold better then the GC version and even started getting notice by some stupid award shows like Spike tv's game award show. Bottom line im trying to say is RE jumping ship was a big mistake. Oh and that jump ship wasn't with out having 1 leg still in the PS sneaking games like RE Dead Aim, and both Outbreaks. Also Dead Aim with a Controller in 1 hand and a Guncon in the other can a very very fun experience, fans should hunt a copy down.

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Kidou

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Along with Oblivion, RE5, Alan Wake, Assassin's Creed... Anything else?

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