Cnet: How Sony is Killing the PS3

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You have to spent money to make money, as they say.
At each PS3 sold they earn money, on Blu discs, on peripherals, on games(duh), on PSN. So they need to sell more Ps3. Is that simple. Face it like a Cell phone company pratically giving cell phones in order to secure a user base(they do that in Brasil, I don´t know if they do it in other places).
In the future, they will probably manufacture the pS3 at a cheap cost and sell it at a profit, but rigth now they need to sell software to cover costs and that require HW.
Sony will not close it´s game division, the article fails on that, but the guy is rigth claiming that a price cut would benefit the company.

"If Sony really wants to do the right thing and address its issues, it needs to drop the price of the Playstation 3. It's as simple as that. I know Sony will try to make a cockamamie claim that by dropping the price, it will operate at a loss and lose even more revenue, but let's be honest with ourselves: every single console maker sells consoles at a loss for a while and once it hits critical mass in its production cycle, it can operate at a profit.

Usually, that plan works. But when Sony shipped a console that was too expensive at the onset, it backed itself into a corner and was forced to maintain a price that's simply not conducive to growth. And now that component costs have dropped and Sony can afford to drop its price, it needs to. The game right now isn't about profits, it's about increasing its userbase to eventually yield significant profits at some point in the future"

The key here is long term and userbase.