I dont think this is a big a dent to Sony as people are making it out to be. Nintendo lost FF to Sony years ago, and it's highly ironic that no Sony is losing FF (well exclusives, not FF entirely). But they aren't screwed.

Mobile Games don't count in this case, because FFVII had a mobile release during the AC release. FFXII already has plans on a DS Release too. Don't forget that Xenosaga Episode I & II came for the DS in Japan.

...Why is no one talking about DMC4? Has it lost exclusive too? D:

Check out Sony's annual/quarterly reports before you say that. the loss of a single game in the past wasn't that big. Now, franchise games are reasons to buy or not buy consoles, with three actual contenders in the market (this has happened before, but the massive difference in the consoles and quality/quantity of games wasn't anywhere near the same as it is now), anything lost to the competetion is huge. Look at how fast the market (talking shares/trades now) responds to emerging weather paterns and can destroy a company over a rumor. This is huge, Sony has put too many eggs in one basket with bluray/PS3 and the money they were planning on making up in games and periphreals.

I'm going to have to agree with Demetrius on this one. Sony was expecting to be able to clean up in game sales to offset the high production costs of the PS3. If there's no reason to buy their games because a slightly less pretty version on another cheaper system exists, then those production costs aren't going down anytime soon.

I wish them luck, but I really don't see much hope left if they can't create some reason to explain to people why they need the extra expense of the system so they can get the same games as everyone else.