Sonys stated original goal for PS was to "kill Nintendo at all costs" that is who they have been going oafter, not microsoft, they never mentioned Ms ever. The Vaio was their entry into PC not the PS. PS is them trying to get rid of Nintendo and then focusing on making thier PCs stronger. So far I only know 1 person who has a Sony Laptop and everyone things its the coolest thing ever around here. When they set out to invade the PC market they werent using PS for that, they were using vaio. It is true that they are going after MS now and that they are more directly competing, but a lot of that is Sony stepped into MS territory witht he Vaio and PS and now MS is getting even by stepping into thier video game market Sony ahs pretty much taken over. Nobody expected Nintendo to be able to stand up to either company, yet they have been doing a pretty good job.
With PSP Sony was continuing thier quest to kill NIntendo, knowing that GameBoy was thier most profitable division, they felt they had to take that away inroder to ensure thier victory. So far they have suceeded in shaking Nintendo up and making them fight harder for thier money, which has made them a better company in many ways. Sony never really was a threat though, despite what people think, Nintendo still had a strong enough impact on people they would always have enough loyalists to stay in business. They knew that but with srinking market share they had to go after a bigger pie because they kept losing the loyalists with so many screwups and flat out ignoring the fans on so many occasions.
I honestly think that Sony would have been better off if they hadn't killed walkman instead evolved it. The walkman may have been on decline but it still had astrong brand name and if they ahd focused on that and left PSP alone they could have been better off, becasue they would have had a cheaper mp3 player and they could have left out the umd crap altogether. The other big mistake they make is they like to use proprietary media formats, and thier stuff is always mroe expensive than other brands. So making an MP3 player that requires thier expensive media sticks vs a generic SD card or even a built in memory is what hurt them alot.
Still they arent competing directly with anyone anymore, before PS Sony competed with big electronics companies and inorder to secure funding for that and a staple place in the market, the bought out major holywood studios to have band to work with not to mention some negociating power. After enterting the video game market they still had to compete with big electronics companies and other hollywood studios, and now Sega and Nitnendo directly, seeing Panasonic enter the video game market along with JVC, and Phillips, three of their biggest competitors, was also liekly a major infouence on the desicion.
Now they got those guys out of video games, then decided to enter the PC market while there at it, and angered MS, who then had to respond by entereing Sonys bread and butter territory. Now they notonly have JVC, Panasonic, Phillaps, Sanyo, etc to compete with directly, they have Nintendo, and Microsoft also to worry about. Sony was way better off not entering video games directly because they could have worked with Nintendo and Sega still would have fallen and MS wouldnt have had a reason to enter video games like they did when they did.
Right now Sony is reaping what they sowed. They went on a rampage buying into as many markets as they could and trying to get bigger and bigger and now instead of having a core market to focus on and direct competition form handful of companies, they have thier hands in every major market and have to directly compete with too many companies to keep track of. Sony somehow expected thier own name to carry them for ever and now they are seeing that people have had enough of thier BS and want change. MS still has a good chance of sucessfully eliminating this new threat to thier software monopoly and they are going to go head to head with Sony until they do. See at thsi point MS *has* to get rid of Sony or get them out of thier territory or else people will start to see there are better Software and OS solutions than what they provide.