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z101 said:
"Microsoft are not stupid"

? They lost over 7billion dollar with their xbox adventure and still loosing money.

Any other firm would have made a fabulous console and a bunch of must have games with this money. And what has MS managed: A broken console and a big minus.

 

If you look at how much lower Sony's Game Division's profit was leading up to the release of the PSP and PS3 and combine that with how large their losses have been since then you will notice that Sony has lost as much as Microsoft (or more) on the PSP and PS3 as Microsoft lost on the XBox and XBox 360. The difference between Sony and Microsoft's financial statements is the super popularity and profitability of the PS2 hide the expense of launching a console, whereas Microsoft has had to depend on their other divisions to subsidize their launches.