The GameCube was my fav console of the last gen. Sure I liked the PS2's software library way better. The the GameCube hardware (and controller) was much more pleasing to use.
Its kinda the same way for me this gen. I like using the PS3 the most... but I still think my PS2's software library is the best lol.
In any case, in the "highly improbable" case that Sony is making money on the $400 PS3s (remember they are a brand new hardware revision since august or so, with all 65nm components), I think a lot of these "bad business" articles may look pretty stupid, come the next financial quarter. MS's games division may appear to be bleeding profusely compared to Sony's -- and stockholders buying Sony stock (after recent economic events) is *exactly* what Sony needs right now.
Its no wonder they haven't made any price cuts. If they did -- they would gain marketshare over the holidays, only to have their stock plummet to new lows come next quarter. That would suck for anyone who wants their PS3 to have a decent library someday. Sony has two options right now:
(A) Gain some marketshare in the short-term, and fall off a financial cliff in the near future.
or
(B) Lose some marketshare in the short-term, be financially stable for the near future, during rough economic times when stockholders are exceptionally "nervous".
They've chosen (B), and I agree completely with that choice. MS has the same options, really -- except they chose (A), because MS has a stable enough foundation to not be totally screwed by some games division losses next Q.