It appears we'll have to agree to disagree on that point, then. And while the executives who run the X-Box and Gaming division may well be dedicated to the console, most of what I've read says that Microsoft shareholders don't share thier faith. Still, while I doubt I'm wrong here I concede the faint possibility.

And I agree with you on the competition being good part, but then I'm a die-hard capitalist and consumer advocate, so whatever benefits us makes me happy.

Blu-ray was always going to win the format war vs HD-DVD.

Last time i checked they counted royalty sales in the companys financial reports... so uh... your the one being dense.

Sony owns 30% of the blu-ray IP. The format is owned by over a dozen companies.

counting the profts of PS2 and PSP... PS3 lost about what PS2 made so far.  The "extra" profits that the PS2 and PSP would of made since the PS3's release accounts for the start of the PS1s profits.

So the PS3 is going to need to reach the PS2 level profits to break even let a lone make a profit.

The real advantage of blu-ray is that it ended the HD format war quicker.  Blu-ray was never going to lose... but this may give it an actual shot of being the next disc based format to see mainstraim use. (though numbers are currently against it.)  If blu-ray captures the mainstream market and not just the enthusiasts market... then maaaaaybe the PS3 breaks even/makes money... but even then you can't be sure that blu-ray wouldn't of did it itself... or if it did.. when etc.

Was it? Stand alone HD DVD's were a lot cheaper. Also without producing so many Blu Ray parts for the PS3, stand alone Blu Ray players would be even more expensive. I am pretty sure Blu Ray had most of the big movie companies on its side because of the millions of PS3 sales.

 I'm pretty sure they lost $4 billion, not 6. http://www.joystiq.com/2005/09/26/forbes-xbox-lost-microsoft-4-billion-and-counting/

Just google it if you want more articles to say the same thing. 

You're correct, sir. Natrually, PS3 will not recoup the cost of its own development or sales at a loss on it's own, but I don't think Sony ever counted on it doing so. However, as long the PlayStation division as a whole stays profitable then it doesn't really matter if one system doesn't make a profit because most of the money put forth to develop new technology in any current system will be used in future systems. It's all one big investment to continue and drive forward the game industry.

MS can afford it. Well it is strange to say a company facing more and more competition and is not made of money like it was, when you see they are making more and more money every single year.

2008 it was something like $60,000,000,000 revenue. So why do you think, MS is running out of money?

You can see from another point of view. MS is getting in the Search-market (can you call it a market?) MS is has its mobile Music player with the zune, MS is getting in the gaming market, Just in addition to the core market which keeps on performing great.

At the end of this generation, MS will have a piece or hardware installed in 45 million households, which offers Xbox Live, which can be connected to the Windows Live Messenger with more than 300 million Users, which supports live.com for searching. MSN.com is the number six in the most clicked sites in the internet, live.com is on four. They will make money out of this. Okay, they are not dominating these markets like they do with Windows / office, but they broke into it and they are here to stay.

Blu-ray was losing before the PS3's release, I don't see how its $599 players could have beat a $199 HD DVD player.

For the same reasons I posted: they're losing money. The chart you posted, while not useless, is limited solely to Microsoft's revenue. Revenue is great, but it is not the same as profit (which is far, far more important). Microsoft's profits have been steady, but it's been spending massive amounts to try and keep either grow in areas beyond its OS division, or to gain ground in places like the MP3 arena (and in the X-Box 360...) that they now have much less cash reserves than they had a measly two years ago (to repeat, they've lost over $30 billion in cash reserves in just two years, which is huge). In fact, now that I think of it I can only recall a small handful of financial articles that are even remotely positive on Microsoft's future prospects. The latter fact alone doesn't guarantee anything, of course, but the former does tell us that Microsoft is headed to financial troubles if it doesn't shape up quickly, and again investors are started to become unhappy with Microsoft's direction in many ways.

Who says Sony's going to follow the loss leader strategy with the next PSP??? Who's to say they don't pull a Nintendo and release a PSP2 that's just a mild technological upgrade of the current system in the same vein Nintendo designed the Wii? They're already following Nintendo's Gameboy/GBA strategy by releasing numerous hardware revisions to generate sales.