Elite costs stores $6 more than it's price...

[Game_boy]

The benefit of stocking consoles despite a negative markup is that customers are more likely keep returning to the store for games.

It also is an easy way of "price fixing": no shop will want to sell below the RRP because they would lose more money on each sale, but not above or they would lose buyers.

And yes, it costs at least $700 to manufacture a 80GB PS3 for Sony now, so they are losing a massive amount of money on each one produced, but if they don't sell well they'll never make back that money from game sales.