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I think the reality is PS3 has already lost all the money Sony has ever made from being in the gaming business. Shareholders will simply not tolerate more losses. At some point, it would become preferable to cut the PS business altogether rather than incur continued losses.

Sony has come to the point where if the finish 3rd, they finish 3rd but at least they want to try to make some profit or at least stop the bleeding on the way.