People still don't realize how badly Sony screwed up the PS 3, financially.
It is true that they didn't profit anything from it, and they plan to, but this requires two factors:
1. Selling consoles above production costs
2. Selling many of them
In their very special case, these two statements are making each other impossible.
They could cut the price later this year, to sell more units and fulfill 2., but this would lead to breaking 1., and staying in the red.
If they keep the current price to fulfill 1, they would fail at 2., and reach extremely low sales around the end of the year.
It will take so much time for them to sell for 250-200$, AND make profits, that around that time,(2012?) Microsoft can easily finish them with a 150-100$ x360.
Especially if we consider that Microsoft is richer, and less vulnerable to losses, so they could literally give away 360's for free at the end of the generation, in order to terminate Sony.
