It is not that long ago that the Sony (NYSE:SNE) PS2 ruled the video game business. Launched in 2000, it had a huge lead over the Microsoft (NYSE:MSFT), which was launched in 2001.

As sales of the PS2 falters, Sony introduced it next-generation platform, the PS3, in the hope of taking its once profitable consumer electronics business from a loss back to an earnings contributor. The plan never panned out.

According to The Wall Street Journal, US sales of the PS3 fell 19% in November. The paper writes "The sales decline is a heavy blow to Sony, which was banking on the video-game division to provide a bright spot as its core electronics business is hit by the global economic downturn.:

The trouble at the Sony game division goes beyond weak sales. In many ways it ends the turnaround efforts of Sony CEO Howard Stringer who got the top job in 2005. He was the first non-Japanese to run the huge company.

The PS3 is a symbol of the downfall of the company that created the Walkman and other leading technology devices. The crown of innovation has been passed to firms like Apple (NASDAQ:AAPL) which can barely keep their products on retail shelves due to their popularity.

The fate of the PS3 may end up looking like the fate of Sony which now has become a permanent second-tier tech company. Its shares trade at $20 down from almost $60 two years ago. The stock will probably never come back.

Douglas A. McIntyre is an editor at 247wallst.com.