No doubt in my mind that Sony is still in the red for PS3. Will they break even by the time the PS3 is discontinued? Probably not, but I doubt it is as bad as it seems. (Wishful thinking, maybe.)

I think they've learned their lesson and this was a good thing for them moving forward as a company. I expect the PS4 to be every bit as good of an investment as PS3 was bad.

You pretty much lost me in the first line of your post:

"I have seen a couple of threads / posts and even articles claiming that the PS3 made one of the greatest comebacks and is a profitable business for Sony. I just had to clear this up."

I've seen a couple of threads discussing a PS3 turnaround, but the focus to me seemed to always be on how they turned a disasterous launch which could well have destroyed the brand of the previous generation's leading console into the top-selling home console for the last two years and a viable product in the market.

Perhaps there have been some other threads discussing the financial side that I've missed.

Regarding that, I definitely agree that Sony made losses with the PS3 that they'll never recover, but I also think we'll never know the true extent of it.  Losses made during the early years were hidden in profits being made from PS2 & PSP sales; while profits made in recent years will have been eaten by Vita losses and R&D and lately PS4 R&D (and probably losses, too).  Plus, I suspect there's probably a fair few more years of PS3 sales to come.

You've still made a well-educated and interesting OP, but yeah, with so much "let's be conservative" and "an educated guess" in there, it really is impossible to tell.

Sony lost billions.. MS lost billions..

Sadly seems like both will lose billions again next gen.

Yep. This is also a problem for 360, though to a lesser degree. It's not clear that either console was an especially successful investment. Both consoles were pretty successful in every way except the bottom line, but that's where it counts.

It also makes it hard to feel good about Wii U achieving a launch on par with PS360. Is Nintendo ever going to earn that money back? Or are the supposed future profits going to get eaten up by hardware price cuts and HD development costs? Even worse, suppose Nintendo jumps through all the hoops that Sony and Microsoft did this generation to get install base and developer support... but the hardware sales don't materialize.

Well, at least you can't lose money subsidizing a product if nobody buys it.

Who knew optimistic guesses are hard facts...news to me.

Ladies and Gentlemen do not let posts like these deter your enthusiasm for the turnaround that has occured for the PS3.  Its not like Sony can go back in time and fix the losses that the PS3 generated.  Also  and the game division include so many variables including yearly game sales (either exceeding or below expectations), discounts and promotions, advertising, price reductions, returns, actual game budgets, PSP, PS2, PS3, the PSP go, vita development, the list goes on. 

I can't see Sony supporting PS3 two or three years after PS4 launches. Maybe some small effort MLB The Show releases and other games that require little investment but nothing substantial.

I just know the PS3 is about to finally put the 360 in the rear-view mirror, and in a couple of years far away as it leaves it in the dust globally each month. PS Brand is going strong for the next-generation PS4, and what does Microsoft have to show for it? hmm? That Kinect is strong? please, it's just pathetic to root for a company that doesn't believe in gaming, and have done nothing with all their "success" but to produce crap like Kinect. Microsoft's been 12 years into the console business and all they have to show for it is Halo and Kinect. As a gamer that totally disgusts me. Screw the financial BS, show me what you've got. Pathetic.

Good for them, I hope they keep at it.