Another thought ...
Between the poor software sales of the PSP, the declining sales of PS2 software, and the high development costs of PS3 games, Sony is not seeing the same levels of profitability that they once saw from game sales. At the same time, we're at a point in the life of the PSP (and the PS3 in the not too distant future) where the Costs of releasing the next generation platform are near to their highest point, and will remain high until (long) after the platform launches.
What this means is that Sony is (currently) in a position where they can not afford to lose money on the PS3 that will not (almost immediately) be recovered in software sales ... Taking a $25 loss (to pick a number) might be acceptable, but taking a $100 loss would only hurt the long term viability of the division.
