It is very possible he meant that PSVita as a whole will be profitable in 3 years. It would be possible for them to be breaking even on the console at launch and still need time to recuperate the incurred costs associated with it (R&D, advertising, etc).

Exactly what Im thinking

Actually typically when sony says profitable, they mean the device is making money that year. For example they said ps3 will be profitable by this year 2010-2011FY, and it was profitable that year, it however does not mean that sony ps3 has rid its incurred costs because the company seems to see them as sunk costs. (at least that is what they said regarding the ps3, I don't know maybe you guys are right about this statement being different). 

Sony really have no choice to go with trying loss leader route.

The three year figure probably also takes into account any planned price cuts.  They may be expecting to sell each device for a profit at $199 or lower at that time.

Maybe, three years is a long time, we will have to see what the future holds.

Sony is like in a "now or never" situation, they are really trying to bring down Nintendo on the handheld market. Sony knows that Nintendo cant offer cutting-edge technology, since Nintendo depends only on their gaming profits and they cant make huge investments on their hardwares, unlike Sony. The strategy could take off, this is nothing like the PS3 mess.

But you don't know what that price was.  It could have been more than $250 and then after the 3DS came out at that price they realized that pricing any higher would be suicide.

ouch three years...hopefully the demand will be great along with software to make that 3 year wait shorter

But you should remember that americans are getting the best deal then everyone with SONY going the same route as Nintendo by charging Europeans/Japanese 100 dollars more. So they could be making profit on the european sales and japanese but losing on the American sales that could make them lose money. Also they could of had it as 300-350 but had to cut there profits to compete against nintendo.